Wednesday, February 15, 2012

KLCI: Crucial 1550 Support To Sustain Rally

Bursa Recap: KLCI ends 4.8 points lower on profit taking consolidation
Asian markets were higher, led by NIKKEI (2.3%), HSI (2.1%) and SENSEX (2%) as sentiment was boosted by hopes that Greece would deliver on a commitment to enact harsh reforms, the unexpected injection of ¥325bn by Bank of Japan to bolster growth coupled with China’s pledge to continue to invest in eurozone government debt.

Bucking the regional uptrend, KCLI moderated 4.8 points to 1561.3 as blue chips remained in profit taking consolidation mode.

FBM KLCI Outlook: Crucial 1550 support
In order to sustain current rally to our envisaged resistance targets of 1570-1580, the KLCI must maintain its posture above 1550 points for the next 2-3 days amid heavy deliveries (last week’s average daily volume of 3.7bn shares).

Following overnight Dow Jones’s fall, the KLCI is likely to continue its consolidation for a while. Immediate supports are 7-d SMA (1558), followed by 10-d SMA (1548). A breakdown below 10-d SMA would likely confirm a reversal and send the index back towards 1534 (mid Bollinger band) and 1527 (30-d SMA).

Daily KLCI - A Breakdown Below 10-Days SMA Will Trigger More Selldown
FBM KLCI 16-02-2012

Source: HLIB Research

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