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

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