Wednesday, October 5, 2011

FBM KLCI: Rebound To Continue But Need Higher Volume To Sustain

Bursa Recap: KLCI buck regional trend
Despite the overnight surge in Dow, Asian markets were mix to lower with the larger markets still suffering from the current risk off mentality. Both the China and Hong Kong markets were closed for holiday.

However, the FBM KLCI buck the regional trend and opened higher and remained in the positive territory for the whole trading day, despite some mid-morning profit taking. Its momentum accelerated in the afternoon session to end the day 14 points or 1% higher.

However, trading volume was lighter at 698 million shares worth RM1.09 billion against Tuesday’s 795 million shares worth RM1.24 billion while gainers outnumbered losers by 435 to 247.

FBM KLCI Outlook: Need higher volume to sustain rebound
The strong overnight surge in Dow (for the second straight day) amidst positive US economic data and rising optimism that the European officials are finally putting their act together to contain the debt crisis, is expected to filter through to Asian markets today. However, for any rally to sustain and convincing, trading activities would have to pick up significant.

Technically, the formation of a Morning Star, the slight golden cross in the MACD and the 5-d SMA cut above the 10-d SMA suggest that yesterday rebound may continue. Volume need to consistently surge above the 1bn mark to sustain the rebound and test the psychological 1400. Immediate resistance levels are the 1376 (5-d SMA), 1400, 1409 (mid Bollinger band) and 1430 (30-d SMA). Supports are situated at the psychological 1350, 1330 (lower Bollinger band), 1310 (26 September pivot low) and the other psychological 1300 level.

Daily KLCI: Potential Morning Star Reversal
FBM KLCI 06-10-2011



Source: HLeBroking
Bloomberg

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