Wednesday, December 14, 2011

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

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