Tuesday, October 11, 2011

KLCI Having More Sideways Consolidation Ahead

Bursa Recap: KLCI jumps 14.6 points to 1411.7
The KLCI finally reclaimed the 1400 psychological level, in tandem with buoyant key regional markets following China's move to buy bank shares to boost the banking sector, the robust 3% overnight surge on Dow and news that EU leaders are finally taking action to settle its festering sovereign debt crisis.

However, sentiment turned cautious when European shares opened lower on Tuesday morning, snapping a four-day rally, in cautious trading ahead of the start of U.S. earnings season and Slovakia vote on the Euro rescue fund.

FBM KLCI Outlook: More sideways consolidation ahead
While momentum and trend indicators remain positive, higher trading volume (preferably 1bn shares/day) is crucial to sustain further gains within the upward channel.

Our immediate target is 1420 (downtrend line resistance), followed by 1434 (61.8% FR from top 1511 and low 1311). A tougher resistance will be 1444 (upper Bollinger band). Meanwhile, supports are near 1393 (mid Bollinger band) and 1385 (10-d SMA). A breakdown below the uptrend line support or UTL near 10-d SMA will trigger greater selling force towards 1357 (23.6% FR) and 1350 levels.

Daily KLCI Has More Upside If The Downtrend Line Resistance Is Violated
FBM KLCI 12-10-2011

Source: HLIB Research

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