Tuesday, November 22, 2011

FBM KLCI Is Taking Cue From Overseas Markets

Bursa Recap: KLCI gains 3.9 points after falling for 5 straight days
Asian stock markets spent most of Tuesday in negative territory, weighed by US and Euro debt concerns and the deadlock by US super-committee to approve the US$1.2trn deficit plan. However, major indexes ended off their lows, led by rebounds in JCI (+1.5%), SET (+1.3%), SENSEX (+0.8%) and STI (+0.7%).

The FBM KLCI also snapped its 5-day losing streaks with a 3.9 points gain, after falling as much as 11 points to 1425 intrday.

FBM KLCI Outlook: Taking cue from overseas
We reiterate our view that investors should capitalize on rebounds to trim their positions or maintain a short-term trading oriented approach, given the start of year end school holidays and the concerns about contagion from the debt crisis in Europe. Meanwhile, the failure of the super-committee to reach a compromise on a debt-reduction plan exposes the U.S. sovereign rating to more downgrades as early as end December.

Give the break below mid Bollinger band or 20-d SMA (now at 1468), the 30-d SMA (1357) and lower Bollinger band (1439) as well as bearish technical readings, KLCI is slated to head south towards the next support at 1420 (38,2% FR) and the 1400
psychological barrier. Immediate resistance levels are 1357, 1468 and 1481 (100-d SMA).

Daily KLCI IS Downside Bias Unless Reclaims Above The 30-Days SMA
FBM KLCI 23-11-2011

Source: HLIB Research

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