Wednesday, April 4, 2012

FBM KLCI Outlook: More Volatility Ahead

Bursa Recap: KLCI closes below 1600 psychological mark
Asian markets declined in lackluster trading as HSI, SHCOMP and TWSE were closed for a holiday. Investors reacted negatively amid fading hopes of more monetary stimulus by Fed, sluggish Spanish bond auction and an unexpected Australian trade deficit. Tracking regional losses, KLCI snapped its 4-day winning streak with a 7.4 points drop to 1559.3.

Losers thumped gainers by 2 to 1 while trading volume and value retraced 5% and 19% to 1.2 billion shares worth RM1.1 billion respectively, as investors remained on the sidelines given the lack of fresh catalysts and election fears.

FBM KLCI Outlook: More volatility ahead
In the wake of sluggish overnight Wall St and European markets, deteriorating technical readings and renewed fears of a prolonged EU debt crisis amid disappointed Spain’s debt sale, KLCI is likely to face more volatility ahead of the looming general election. Immediate resistance remains at 1600-1630.

Immediate supports are 10-day SMA (1591) and mid Bollinger band (1583). A breakdown below 1583 will drive KLCI lower towards supports at the 30 and 50 day SMAs at 1579 and 1565 respectively. We reiterate that investors should take opportunity of a sideway market to top-slice and turn more defensive/nimble.

Daily KLCI - More Weakness Ahead Following The Evening Doji Star Formation
FBM KLCI 05-04-2012

Source: HLIB Research

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