Tuesday, December 20, 2011

Dow Jones: Crucial Uptrend Line Support Near 11500 Points To Prevent Further Downside

Wall Street recap: Dow Jones down 100 points on Europe woes
The Dow surrendered the earlier 59-pt gain to end 100 points lower at 11766, mainly due to the fall in financials after investors worried that Basel III capital requirements would provide another blow to the industry. Sentiment was also jolted by ECB’s President cited substantial risks to the economy and said the ECB can’t step up government bond purchases under its founding piece of legislation.

Meanwhile, European finance ministers failed to agree on raising the joint ceiling for the European Stability Mechanism and European Financial Stability Facility.

DJIA outlook: Crucial 11500 support levels
The Dow Jones had retreated 4.2% to end at 11766 from its recent high of 12284 (27 Oct). The fall was driven by the persistent deadlock in Euro debts crisis management and an uncompromised plan and fears of potential en-mass bonds rating downgrades by credit rating agencies, overshadowing the gradual progresses in the recent US economic data.

Following the breakdown of 200-d SMA (11936), mid Bollinger band (11831) and 50-d SMA (11821) supports coupled with the negative technical readings, the Dow may retest lower uptrend line and 100-d SMA supports near 11500. A violation of 11500 will push index lower towards a more solid support of lower Bollinger band at 11250.

Immediate resistance levels are 11936-12284 levels.

Daily DJIA: Crucial Uptrend Line Support Near 11500 Points To Prevent Further Downside
DowJones20-12-2011



Source: StockCharts.com

KLCI: Upside Bias Following The Strong Breakout

Bursa Recap: KLCI up 11.6 points, bucking regional slump
Regional bourses fell amid concerns over more downgrade warnings on Europe sovereign bonds and fears of regional instability after the death of North Korea leader Kim Jong il,

Bucking the downtrend, FBM KLCI jumped 11.6 points to 1477.8, spurred by window dressing activities on selected index-linked counters such as AXIATA (+14 sen to RM5.00), DIGI (+8 sen to RM3.70), GENTING (+16 sen to RM10.54), YTL (+8 sen to RM1.54) and CIMB (+5 sen to RM7.05).

FBM KLCI Outlook: Holding well above 1450
Technical readings have turned better following yesterday 11.6 points gain to stage a strong breakout above the downtrend line. However, given the persistent negative headlines from Europe and thin volume ahead of the year-end holidays, we expect the local bourse to remain volatile albeit with an upward bias due to the window dressing activities.

Immediate crucial support is the 50-d SMA or uptrend line (1458), followed by last week’s low at 1448. A breakdown of 1448 would mean that the rally from 1311 low (Sep 26) is likely exhausted and will head toward lower Bollinger band (1428). Resistance levels are 38.2% FR (1487) and 200-d SMA (1502).

Daily KLCI: Upside Bias Following The Strong Breakout
FBM KLCI 20-12-2011



Source: HLIB Research

Monday, December 19, 2011

Daily DJIA: More Range Bound Consolidation Ahead

Wall Street recap: Dow Jones ends flat to record a 2.6% weekly decline
The Dow Jones jumped as much as 99pts buoyed by recent positive economic data and an easing inflation in November that could create room for Fed stimulus in 2012.

However, the gains evaporated after Fitch put 7 Europe countries (i.e. France, Belgium, Spain, Slovenia, Italy, Ireland and Cyprus) on credit watch negative, citing the higher probability that it could downgrade these nations in the next few months. The sell-off was also driven by the "quadruple-witching”.

Daily DJIA: More Range Bound Consolidation Ahead
DowJones19-12-2011



Source: StockCharts.com

Sunday, December 18, 2011

KLCI: Window Dressing Activities To Cushion External Swings

Bursa Recap: KLCI up 2.1 points to notch a 0.4% weekly gain
In the wake of the US better-than-expected weekly jobless claims and December Philly Fed manufacturing reports, Asian markets rose, discounted concern over Europe’s debt crisis and Fitch’s downgrade of 5 major European groups.

KLCI also inched up 2.1 pts to record a 6.1 pts weekly gain, supported by PBBANK (+22 sen to RM13.02), CIMB (+8 sen to RM7.00), PETCHEM (+8 sen to RM6.16), YTL (+5 sen to RM1.46) and PPB (+36 sen to RM16.76).

FBM KLCI Outlook: Window dressing activities to cushion external swings
For the next two weeks, Bursa Malaysia’s trading volume is expected to be low, with many market players taking time off ahead of the holidays, as low trading volume tends to exaggerate swings in the market.

Despite external volatility, we remain cautiously optimistic that the KLCI is likely to offer some counterbalance to the uncertainty in Europe and advocate the strategy of buy on weakness and take profits in any rebound, in anticipation of year-end window dressing activities, potential Chinese New Year and pre-election rallies as well as sufficient domestic catalysts and fiscal stimuli that will support a modest economic growth in 2012.

Immediate crucial support is the 50-d SMA or uptrend line (1456), followed by last week’s low at 1448. A breakdown of 1448 would mean that the rally from 1311 low (Sep 26) is likely exhausted and will head toward lower Bollinger band (1425) and 61.8% FR (1420) supports. Resistance levels are 10-d SMA (1471), 38.2% FR (1487) and 200-d SMA (1502).

Daily KLCI: Consolidating Upwards
FBM KLCI 19-12-2011



Source: HLIB Research

Friday, December 16, 2011

DJIA: More Consolidation Ahead As Technical Indicators Heading Lower

Wall Street recap: Dow reduces earlier 144-pt gain to 45 points
After plunging 361 points in last three days, the Dow staged a technical rebound to as high as 144 points before ending only +45 points at 11867 on profit- taking.

The improvement was mainly due to a better-than-expected weekly jobless claims and Dec Philly Fed manufacturing reports which overshadowed concern over Europe’s debt crisis and Fitch’s downgrade of 5 major European groups.

Daily DJIA: More Consolidation Ahead As Technical Indicators Heading Lower
DowJones16-12-2011



Source: StockCharts.com

KLCI Uptrend Intact As KLCI Reclaimed 1450

Bursa Recap: KLCI ends +1-point after tumbling as much as 14.6 points
Asian markets continued its southbound journey after Dow fell 1.1% overnight and commodity prices plunged on mounting fears about euro-zone debt troubles and Fitch’s downgrade of 5 major European groups. Concern about Asia’s economic health also contributed to the sell-off following lower-than-expected China’s and Japan manufacturing reports.

Mirroring negative vibes from abroad, KLCI tumbled as much as 14.6 points to 1448.5 before bargain hunting on selective bluechips spurred the KLCI into a marginal 1-pt gain at 1464.1.

FBM KLCI Outlook: Uptrend still intact
The local bourse displayed some resilience yesterday as it managed to recouped a 14.6-pt loss to end 1-pt marginally higher and closed above the uptrend line support, despite overnight Dow Jones’ fall and sluggish regional markets.

We remain cautiously optimistic that the KLCI is likely to offer some counterbalance to the uncertainty in Europe and advocate the strategy of buy on weakness and take profits in any rebound, in anticipation of year-end window dressing activities, potential Chinese New Year and pre-election rallies as well as sufficient domestic catalysts and fiscal stimuli that will support a modest economic growth in 2012.

Immediate crucial support is the 50-d SMA or uptrend line (1454). A breakdown of 1454 would mean that the rally from 1311 low (Sep 26) is likely exhausted and will head toward lower Bollinger band (1426) and 61.8% FR (1420) supports. Resistance levels are 10-d SMA (1476), 38.2% FR (1487) and 200-d SMA (1502).

Daily KLCI: Uptrend Remains Intact As Index Reclaims Above 50-Days SMA
FBM KLCI 16-12-2011



Source: HLIB Research

Axiata Berhad: Fruitful Dialog with Suntel

16 December 2011
Price Target: RM4.92
Share Price: RM4.90


News
# In its filing to Bursa Malaysia, Axiata announced that Dialog has entered into a Share Purchase Agreement (SPA) to acquire 100% of the ordinary shares of Suntel Ltd from its current shareholders.

# The acquisition price tag is in the range of USD33.9m and USD34.9m, corresponding to a valuation multiple of 3.0x to 3.1x of the EBITDA of Suntel for financial year ended 31 December 2010. This purchase will be financed via internal generated funds.

# The SPA stipulates the fulfillment of the conditions precedent within a maximum period of 6 months from the date of the SPA.

# Suntel is the second largest fixed telco in Sri Lanka with 382 base stations offering fixed voice solutions, data solutions, data center and managed services.

Financial impact
Although the acquisition cost is perceived to be relatively cheap comparing to Axiata’s EV/EBITDA of 5.7x for FY11, Suntel’s contribution to the bottom line is not expected to be very positive assuming high gearing and hefty depreciation cost as a result of CAPEX intensive nature of the telecommunication business.

Comments
# However, we view this positively as this acquisition will allow Dialog expand its market share especially in the corporate and SME segments. The firm said that the merged entity will have 23% of the fixed access market share.

# The merger would allow Dialog to enjoy greater cost savings and efficiency through economy of scale and scope. This can be achieved by consolidating radio sites, sharing transmissions / backhaul, data centers, marketing (crossselling) and rationalizing distribution network.

# We have cross checked with Axiata that Dialog does not need to surrender Suntel’s spectrum licenses to the government after the acquisition.

Catalysts
- Higher smartphone penetration boosting data ARPU.
- Strong growth in low penetration developing markets.
- More cost savings from collaboration with DiGi.

Risks
Regulatory risks, FOREX fluctuations & competitive risks.

Forecasts
Unchanged.

Rating: HOLD, Target Price: RM4.92
Positives
Despite the challenging 3Q11, Axiata’s main businesses (Celcom, XL, Dialog) continue to execute well.


Negatives
Exposure to Indian telecom market which is currently under close scrutiny by the government.

Valuation
We reiterate our HOLD call with unchanged target price of RM4.92. We opine that the robust growth story may have come to an end especially for Celcom and XL who are the
main contributors as market matures and competition intensifies.



Source: HLIB Research

Thursday, December 15, 2011

DJIA & VIX: Daily VIX Is Grossly Oversold

DJIA: Downside bias amid weakening technicals
Deteriorating economic outlook and debt crisis in Europe coupled with the prospect of mass credit ratings downgrade in Europe as well as the latest batch of China weak economic data has resulted in volatile market swings, risk aversion, vulnerability
and growing demand for safe havens.

After rebounding from 25 November low of 11232 points, the Dow surged to as high as 12266 on 7 December before retreating lower to close at 11823 yesterday, below the 200-d SMA of 11942 points.

Following the breakdown of 200-d SMA and mid Bollinger band (11829) as well as the weakening technical outlook, downside risks of Dow Jones has increased. Further supports are 11774 (50-d SMA and uptrend line support near 11600. Immediate resistance levels are 11942, 12000 and 12266 levels.

VIX: Anticipating a technical rebound
The European euphoria was short-lived as investors fear resumed this week given the VIX, also known as the "fear indicator, rose from recent low of 23.3 to end at 26.0 yesterday, above the long term uptrend of 200-d SMA at 25.6.

In view of the grossly oversold indicators, we may witness possible technical rebound in the coming days amid rising external woes. A breakout above the downtrend channel near 30 will likely to prompt more upside towards 35.0-36.0 territory, triggering an alarm bell to Dow and global equity markets.

Immediate supports are 23.3 and 20.0.

Daily VIX: Grossly Oversold
VIX index 15-12-2011



Source: HLIB Research

Daily DJIA: Downside Bias As Technical Indicators Are Worsening

Wall Street recap: Dow Jones drops 131 points, its 4th decline in five sessions
The Dow Jones slid for a third day and hit its lowest level in two weeks amid widespread risk aversion that sent commodity prices tumbling, drove the euro to its lowest in a year and forced Italy to pay a euro-era high to sell debt.

The Italian sovereign debt auction saw the euro zone's 3rd largest economy pay a euro era record yield of 6.47% to sell five year paper, following the EU summit that tried to move towards greater fiscal integration last week.

Daily DJIA: Downside Bias As Technical Indicators Are Worsening
DowJones15-12-2011



Source: HLIB Research

FBM KLCI HasMore Downward Correction If 1450 Support Falters

Bursa Recap: KLCI inches down 2.3 points at 1463.1
Regional markets continued its downtrend as the Eurozone debt crisis, fear of more credit downgrades and no fresh pledges from Fed on further stimulus kept investors on the sidelines.

Mirroring regional markets’ pessimism, KLCI was 2.3 pts lower at 1463.1, driven by losses in GENTING (-22 sen to RM10.42), KLK (-50 sen to RM22.60), AMMB (-10 sen to RM5.76), GENM (-5 sen to RM3.85) and IOICORP (-3 sen to RM5.09).

FBM KLCI Outlook: More downward correction if 1450 support falters
Ongoing doubt over the euro-zone debt crisis and prospect of mass euro zone sovereign rating downgrades should continue to dampen investors’ sentiment and encourage wild swings in the financial markets.

Immediate crucial support is the 50-d SMA or uptrend line (1450). A breakdown below 1450 would mean that the rally from 1311 low (September 26) is likely exhausted and will head toward lower Bollinger band (1426) and 61.8% FR (1420) supports.

Resistance levels are 10-d SMA (1476), 38.2% FR (1487) and 200-d SMA (1502).

Daily KLCI: Uptrend Line Support Looks Shaky



Source: HLIB Research

Wednesday, December 14, 2011

Daily DJIA: Downside Bias Amid Weakening Technicals

Wall Street recap: Dow Jones drops 66 points to 11955 amid fed disappointment
Against a weak growth in Nov retail sales, the Dow Jones jumped as much as 126 points following a better-than-expected Spain bonds auctions and Germany investor confidence report.

However, the Dow Jones cancelled all gains and dropped 66 points to end below 12k after German Chancellor Angela Merkel again rejected any increases in the bailout fund for European sovereign debt and the Fed delivered little hope that it would turn on the easing spigots anytime soon.

Daily DJIA: Downside Bias Amid Weakening Technicals
DowJones14-12-2011



Source: StockCharts.com

KLCI: Critical Support Near 1450 Points

Bursa Recap: KLCI down 1.7 points from as much as -9.8 points intraday
Regional markets fell given that investor’s sentiment remained jittery as the Eurozone debt crisis and fear of credit downgrades in that region kept investors on the sidelines. Sentiment was also cautious ahead of the release of U.S. Nov retail sales report and FOMC meeting outcome tonight.

Mirroring regional markets’ pessimism, KLCI lost as much as 9.8 points before narrowing its losses to -1.7 points at 1465.4.

FBM KLCI Outlook: Critical 50-d SMA support

Volatility is here to stay for a while in the wake of external woes, particularly from Europe. While Europe is on the prescribed path, time is needed to finally resolve the debt issue. Hence, we still advocate the strategy of buy on weakness and take profits in any rebound, in anticipation of year-end window dressing activities,
potential Chinese New Year and pre-election rallies as well as sufficient domestic catalysts and fiscal stimuli that will support a modest economic growth in 2012.

Immediate crucial support is the 50-d SMA or uptrend line at 1450. A breakdown below 1450 would mean that the rally from 1311 low (September 26) is likely exhausted and will head toward lower Bollinger band (1426). Resistance levels are 10-d SMA (1476), 38.2% FR (1487) and 200-d SMA (1502).

Daily KLCI: A Breakdown Of Uptrend Line Support Will Be Negative For The Market
FBM KLCI 14-12-2011


Source: HLIB Research

Wednesday, December 7, 2011

Global Market Weekly Review, 29 November - 2 December 2011

Euro-area finance ministers agreed to extend the capacity of the European Financial Stability Fund (EFSF) by “introducing sovereign bond practical risk participation and a co-investment approach,” the EFSF said. The EFSF has a current lending capacity of €440 billion. The EFSF should be able to leverage its own resources of up to €250 billion. “Under the partial-risk protection, EFSF would provide a partial protection certificate to a newly issued bond of a member state,” the statement cites Klaus Regling, EFSF chief executive officer, as saying.

The Philippines kept its benchmark interest rate unchanged for a fifth meeting as persistent inflation prevented the central bank from joining Indonesia and Thailand in cutting borrowing costs to bolster growth. Bangko Sentral ng Pilipinas kept the rate it pays lenders for overnight deposits at 4.5%. The decision was predicted by 14 of 17 economists in a survey.

US stocks declined as better-than-forecast manufacturing growth and a rally in French and Spanish bonds were not enough to extend the biggest three-day gain in the Standard & Poor’s 500 Index since March 2009. The S&P 500 slid 0.2% to 1,244.58. The Dow Jones Industrial Average decreased 25.65 points (-0.2%) to 12,020.03.


Source: ING Funds Berhad

Malaysia Fixed Income Market Review, 29 November - 2 December 2011

Fixed Income
Buying momentum on Malaysian Government Securities (MGS) improved during the week under review, on the back of a stronger Ringgit and improved risk appetite along regional stock and debt markets. Gains were recorded mostly along the front and bellies of the yield curve with the 3-, 5- and 7-year benchmark yields falling by 9, 6 and 4 basis points week-on-week (WoW) respectively to 3.05%, 3.24% and 3.54%. Meanwhile, the 10-year benchmark MGS yield fell by 1 basis point WoW to 3.74%. For the 5-year MGS reopening auction, the RM3.0 billion auction garnered rather mild interest, with a bid to cover ratio of 1.78x at an average yield of 3.303%.

Of note, the foreign holdings of Ringgit-denominated MGS climbed higher in October at RM94 billion (34% of the outstanding MGS) after some unwinding of positions in September.

For Private Debt Securities (PDS) market, trading was largely focused on AA-rated papers, and followed by AAA-rated papers. Banking and power sectors remained as investor’s top pick.

Fixed Income Outlook
Local government bond market will continue to take hints from the development in the Eurozone and the US Treasuries in charting its direction. On economic front, despite the expectation of a moderating growth prospect in Malaysia for the last quarter of the year, the Economic Transformation Programme and a healthy domestic spending, should help to achieve the projected 5-6% Gross Domestic Product (GDP) growth for 2011.

As for the final government bond auction for this year, we believe the 3-year Government Investment Issues (GII) reopening auction should be well received. Meanwhile, investors are waiting for the new auction calendar for 2012 to better gauge demand supply dynamics of the government bond segment for next year.

We expect corporate bond market to be well supported for the rest of the year and investor may continue to extend duration on tame inflation and stable interest rate outlook.

Fixed Income Strategy
We remain positive on local bond market in general with focus on value enhancing corporate bonds. We look to participate in new issuances for further diversification and yield enhancement.



Source for MGS levels: Bond Pricing Agency
Source: ING Funds Berhad

FBM KLCI Closes The Week On Positive Territory, 29 Novermber - 2 December 2011

Equity
It was a good week for equity as the concerted effort by several central banks to slash the penalty rate on dollar liquidity generated positive sentiment. It managed to break the 1,500 points on Thursday before tapering off to 1,489 points as investors accumulate blues that have strong fundamental. For the week, the FBM KLCI jumped 57 points or 4% to 1,489points and briefly broke through the 1,500 points level before easing back. The FBMKLCI underperformed the region for the first time in five weeks as up to Thursday the index was up 3.8% against the steeper 8.7% surge by the MSCI FExJ. Average daily trading value for the week rose 54% to RM1.75 billion (RM1.14 billion previously), which was 11% above the three-month average of RM1.57 billion.

Equity Market Outlook
We believe the market still has strength to move further underpinned by policy respond and seasonality. In the short term, we expect the market continue to consolidate with upward bias as investors position themselves for year end window dressing. On the downside, the market immediate support is at 30 days smooth moving average (SMA) situated at 1,464 points.

Equity Market Strategy
Stock picking is still our strategy with preference for liquid fundamental stocks on weakness.



Source: ING Funds Berhad

DJIA Shows Upside Bias Following A Breakout Above The Downtrend Line

Wall Street recap: Dow Jones rises 52 points amid EU optimism
Dow Jones soared as much as 118 points intraday amid a report that EU officials may be creating two separate rescue funds to help contain the region's ongoing sovereign debt crisis. Negotiators are considering allowing the existing €400 billion European Financial Stability Facility (ESTF) fund to continue running when a new €500 billion facility known as the European Stability Mechanism (ESM) comes into force in mid-2012.

Nevertheless, the early gains were cut to 52 points as S&P said it is considering downgrading the EFSF.

Daily DJIA Shows Upside Bias Following A Breakout Above The Downtrend Line
DowJones07-11-2011


Source: StockCharts.com

KLCI Market To Remain Choppy Ahead Of The EU Summit

Bursa Recap: KLCI ends flat on profit taking
Asian markets fell after S&P warned it might downgrade euro zone countries en masse if the EU summit on Dec 8-9 fails to produce a credible plan to solve the region's debt crisis. The warning brought to a halt a rally in global equities that began last week, spurred by the world's six major central banks moved to tame potential liquidity crunch for European banks by providing cheaper dollar funding, along with monetary easing in China.

Tracking regional losses, KLCI closed 9 points lower at 1480.9, driven by losses in CIMB (-12 sen to RM7.09), MAYBANK (-9 sen to RM8.20), TENAGA (-7 sen to RM5.65), GENTING (-10 sen to RM10.82) and AXIATA (-4 sen to RM4.95).

FBM KLCI Outlook: Choppy ahead of EU summit
Ahead of the EU summit and the S&P’s downgrade warnings on euro zone countries en masse, the local bourse will waver for the rest of this week.

Technically, KLCI is looking lethargic after the 9 points fall yesterday, with crucial supports at the mid Bollinger band (which is also the 20-days SMA at 1465) and 100-day SMA (1471) levels. A breakdown below 1465 support will accelerate more selling pressures towards 50-d SMA (1440) and recent low of 1423 (November 23). Immediate resistance remains at 200-d SMA (1503).

Daily KLCI Shows Crucial Support At 1465
FBM KLCI 07-11-2011



Source: HLIB Research

Thursday, December 1, 2011

Axiata Berhad: 3Q11 Results Briefing

2 December 2011
Price Target: RM4.92
Share Price: RM4.93


Highlights
Axiata recorded a strong subscriber growth of 26% yoy reaching 186.9m customers despite softening key markets. Revenue growth continues to be driven by significant increase in data particularly at XL and Celcom with YTD growth of 50% and 29% respectively.

Celcom subscriber base declined to 11.4m (2.7m postpaid and 8.7m prepaid) due to rationalization of multi-SIM user and we think this is the reason that ARPUs are elevated (postpaid +RM3 to RM95 while prepaid +RM1 to RM37). Meanwhile, MoU broke its down trend and came in higher +6% qoq at 210mins thanks to the festive season in 3Q. Wireless broadband contributed RM197m with +6% qoq on the back of 924k subscribers. Smartphone penetration is 15%.

XL successfully gained momentum and acquisition through new offerings with 12% subscribers increase qoq reaching 43.4m. Prepaid ARPU stagnated at IDR31k while postpaid plunged to IDR171k or declined -17% qoq even though 3Q should have the benefit of festive season. XL explained that lower outgoing MoU is due to shifting in subscribers’ behavior from voice to SMS and data usage. Smartphone penetration is 11%.

Dialog recoded a healthy growth in revenue mainly contributed by mobile, TV and infra businesses. ARPU increase 8% qoq driven by increase take up of premium VAS products. MoU growth mainly by prepaid due to increase in affordability.

Robi qoq revenue growth attributed mainly to VAS including data services and interconnect business. PAT decreased qoq by FOREX loss and accelerated depreciation on old swapped equipment due to network modernization.

Catalysts
- Higher smartphone penetration boosting data ARPU
- Strong growth in low penetration developing markets.
- More cost savings from collaboration with DiGi.

Risks
Regulatory risks, FOREX fluctuations & competitive risks.

Forecasts
Updated with latest guidance on higher CAPEX and depreciation along with tweaking lower our assumptions of subscriber base and ARPU. Our FY11-FY13 EPS are revised lower by -9.0% to -10.7%.

Rating - HOLD, Target Price: RM4.92
Positives
Despite the challenging 3Q11, Axiata’s main businesses (Celcom, XL, Dialog) continue to execute well.

Negatives
Exposure to Indian telecom market which is currently under close scrutiny by the government.

Valuation
We keep our HOLD call as we cut out target price by 9% to RM4.92 from RM5.44. We opine that the robust growth story may have come to an end especially for Celcom and XL who are the main contributors as market matures and competition intensifies.



Source: HLIB Research

Daily DJIA Is Drifting Sideways

Wall Street recap: Dow Jones eases 26 points after surging 4.2% on November 30
After spiking 4.2% on November 30, Dow Jones drifted 26 points lower to 12020 overnight amid an unexpected rise in weekly jobless claims and ahead of the crucial Oct job data tonight.

However, overall sentiment remained firm in the wake of the stronger-than-expected Nov ISM and Oct construction spending figures.

Daily DJIA Is Drifting Sideways
DowJones02-11-2011



Source: StockCharts.com

KLCI Is Having More Sideways Trading After Surging 54 Points In 3 Days

Bursa Recap: KLCI up 13.2 points, off day high of +30 points
Despite easing China’s Nov PMI to 49 from 50.4 in October, Asian markets surged after the world's six major central banks moved to tame a liquidity crunch for European banks by providing cheaper dollar funding, along with monetary easing in China.

Tracking the strong Asian markets, FBM KLCI closed 13.2 points higher at 1485.3, off intra-day high of 1,502.5 (+30.4 points). Leading movers were IOICORP (+17 sen to RM5.18), PBBANK (+20 sen to RM12.74), PETCHEM (+18 sen to RM6.17), MAYBANK (+9 sen to RM8.39) and DIGI (+8 sen to RM3.60).

FBM KLCI Outlook: More sideways trading after surging 54 points in 3 days
On the backdrop of a 3-day 54 points jump and a gravestone Doji formation yesterday, KLCI is likely to encounter more profit taking activities ahead but any selling pressures are likely to be well-absorbed as technical indicators remain positive.

As long as the KLCI is able to maintain its posture above the uptrend line support near 1440 points, we remain short term positive on KLCI. Immediate resistance remain at 200-d SMA (now at 1504) whilst supports are situated at 100-d SMA (1474 points), 1463 (mid Bollinger band) and 50% FR (1454).

Daily KLCI Is Having More Sideways Amid A Gravestone Doji Formation
FBM KLCI 02-11-2011



Source: HLIB Research
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