Monday, January 16, 2012

Sideways consolidation ahead of the CNY holidays

Bursa Recap: KLCI eases 2.5 points but still gains 0.6% wow
Asian markets rose amid successful Italian and Spanish bond auctions and positive ECB President’s remark that euro area showed "tentative" signs of recovery. However, SHCOMP tumbled due to profit taking on weakening 4Q11 forex reserves.

FBM KLCI lost 2.5 points as bigcaps continued to consolidate recent gains whilst interests remained on lower liners and penny stocks, reflected by a 17% jump in daily volume to 1.77 billion shares whilst trading value only inched up by 2% to RM1.61 billion.

FBM KLCI Outlook: Sideways consolidation ahead of the CNY holidays
Technically, trend and momentum indicators have turned less bullish after failing to close above 1531 points (intraday high on 31 December 11) last week. On the backdrop of eurozones crisis, the CNY long holidays weekend and continued consolidation in bigcaps, the market could be trapped within a narrow range on extended consolidation in the immediate term.

Despite short term consolidation, as long as KLCI continues to remain its posture above the 200-d SMA and mid Bollinger band supports (now at 1501), KLCI is still likely to slowly filling the huge gap between 1529-1546 which was recorded on 5 August 2011

Daily KLCI: Immediate Supports Near 10-Days SMA And 200-Days SMA
FBM KLCI 16-01-2012

Source: HLIB Research

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