Sunday, November 13, 2011

KLCI Is Going For Range Bound Trading

Bursa Recap: KLCI drops 3.9 points last Friday to record -0.6% wow
Tracking the mixed regional markets, FBM KLCI eased 3.9 points last Friday to 1468.8. WoW, KLCI declined 0.6%, its 2nd consecutive losses amid external woes that the contagion from the European sovereign debt crisis could spread from Greece to Italy, and possibly later to Spain (gross external debt/GDP of 153% in 2010).

Average daily traded volume and value jumped 41% and 5% to 2.3 billion shares worth RM1.5 billion respectively, as ACE Market and penny stocks surged due to strong retail participation.

FBM KLCI Outlook: More range bound trading this week
Markets seem to be pleased in moving away from two big uncertainties, following the formation of interim Governments in Greece and Italy can start working on agreed austerity measures that could pacify investors and stabilize the financial markets.

Moreover, the statement by Datuk Seri Najib Tun Razak on 11 November that the general election would not be held this year put an end to weeks of speculation.

Technically, daily trend and momentum indicators are pointing to more consolidations as the KLCI fell below the 10-d SMA (now at 1477 points) and is unable to break the 100-d SMA (now at 1489) and 1500 psychological levels over the last two weeks. However, more positive readings on the weekly slow Stochastics and MACD should support further upside in the medium term. Thus, any downside consolidation will be mild and well-supported by recent November’s low of 1452 points and 30-d SMA (1439 points).

Daily KLCI: A Breakdown Below Mid Bollinger Band Will Drive KLCI Lower To 30-Days SMA
FBM KLCI 14-11-2011

Weekly KLCI: Signs Of Consolidation As Index Falls Below Mid Bollinger Band
FBM KLCI 14-11-2011a

Source: HLIB Research

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