Thursday, October 13, 2011

KLCI To Test 1441-1444

FBM KLCI Heading Towards 1441-1444

Bursa Recap: KLCI surges 16.8 points to 1428.5, breaking the 30-d SMA
China’s sovereign-wealth fund buying shares in selected banks and rebound in SHCOMP lifted most Asian stocks into positive territory from early losses (weak results by Alcoa and Slovakia's rejection of a plan to expand the euro zone rescue fund kept
investors nervous).

Tracking the recovery in regional markets, KLCI closed 16.9 points higher at 1428.5 after dipping as much as 9.4 points in early trading. Trading volume increased slightly to 1.08bn shares worth RM1.3bn against Tuesday’s 1.06bn shares worth RM1.38bn, supported by index-linked counters GENTING (+30 sen to RM9.80), IOICORP (+13 sen to RM5.00), MISC (+25 sen to RM6.00), PBBANK (+10 sen to RM12.44) and PETCHEM (+11 sen to RM5.80), as well as election-linked stocks in anticipation of looming 13th general elections.

FBM KLCI Outlook: Heading towards 1441-1444
The positive overnight closing on Dow and European markets are likely to bode well for our market today, with KLCI expected to retest our near short term target of 1450 points. While momentum and trend indicators remain positive, higher trading volume (consistently above 1bn shares/day) is crucial to sustain further gains.

After violating the 1411 (downtrend line resistance) to close at 1428.5 yesterday, the KLCI is expected to break 1435 (61.8% FR from top 1511 and low 1311) and test the next two resistance levels at 1441 (upper Bollinger band) and the other down trend line at 1,444. Meanwhile, supports are near 1414 (30-d SMA), 1406 (5-d SMA) and 1391 (10-d SMA).

KLCI To Test 1441-1444
FBM KLCI 13-10-2011

Source: HLIB Research

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