Friday, October 21, 2011

KLCI Focus On The EU Summit Outcome Over The Weekend

Bursa Recap: KLCI dropped 9.1 points, recovered from low of -21 points
Asian markets were lower on concern about slowing economic growth in China as well as divisions among European leaders over the EU’s weekend summit that could derail real progress in keeping the euro zone debt crisis in check.

Tracking regional fears, FBM KLCI tumbled as much as 21 points intraday before paring down its losses to 9.1 points at 1441.2. Lagging movers were AXIATA (-12 sen to RM4.73), GENTING (-12 sen to RM10.00), SIME (-7 sen to RM8.58), PETCHEM (-8 sen to RM6.04) and CIMB (-4 sen to RM7.19).

FBM KLCI Outlook: KLCI: Focus on EU Summit
Global markets that are tethered to hopes for a European debt crisis solution is likely to remain volatile and confused in the immediate term, depending on the outcome from the upcoming EU discussions from 23-26 Oct and a later one from G20 on 3-4 Nov. The consensus view is now that it could take months or more for the situation to get resolved.

Moreover, with the FBM KLCI broken below the uptrend line (formed since late Sep 11), we continue to advocate risk-averse investors to sell into strength or trim positions. Resistance zones are 1470 (15-w SMA) and 1495 (20-w SMA). Immediate
supports for pullbacks are 1432 (10-d SMA), 1411 (30-d SMA) and the 1400 psychological levels.

Daily KLCI: A Fall Below Uptrend Channel Will Spur Index Lower Near Mid Bollinger Band
FBM KLCI 21-10-2011

Source: HLIB Research

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