Wednesday, February 29, 2012

KLCI To Retest 1590-1600 Points Due To Liquidity Driven Rally

Bursa Recap: KLCI jumps 0.83% to 8M high, tracking ASEAN bourses
Asian markets rose on hopes a fresh cash injection by the ECB will help further avert credit crunch and bolster investors’ confidence. Sentiment was also boosted by robust U.S. and German consumer confidence data and falling crude oil prices.

Powered by the liquidity inflows particularly into the ASEAN regions, the USD/RM finally breached below the RM3.00 psychological mark to end at 2.993, fueling the KLCI to soar 12.9 pts or 0.83% to 1569.7 (off intraday high: 1573.8). Notable gainers in ASEAN markets were JCI (2.1%), PSEi (1.6%), SET (1.3%) and STI (0.8%).

FBM KLCI Outlook: Likely to retest 1590-1600 points on liquidity driven rally
Thanks to the fresh injection of cheap money by the ECB, fresh liquidity inflows are expected to stay firm in the near term, benefitting equities and currencies in the emerging markets.

Amid the positive developments and a successful breakout of 15 Feb’s pivot high at 1567 yesterday, a resumption in rally post CNY (albeit intermittent profit taking consolidation) is likely for KLCI to eventually heading towards the 1590-1600 resistances.

Major supports are 1560 (14-d SMA), 1553 (mid Bollinger band) and 1542 (30-d SMA).

Daily KLCI - A Glimmer Of Hope To Retest The Upper Channel
FBM KLCI 01-03-2012



Source: HLIB Research

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