Monday, April 16, 2012

KLCI - External Woes To Exert Downward Pressures

Bursa Recap: KLCI ended higher on local funds support
Asian markets rose in the morning sessions following a strong overnight rally on Wall Street and European markets. Despite China announcing a lower-than-expectation 1Q12 GDP of 8.1% (consensus: 8.4%), Asian shares held steady as the discouraging data lifted hopes of fresh monetary easing by Beijing.

Amid strong buying support on Tenaga following its positive 1H12 results, KLCI gained 1.9 points at 1603.1. Despite clouded by mostly negative external developments, KLCI inched up by 4.3 points in a holiday-shortened week, mainly on local fund buying support with local institutionals accounted for average 56% of last week’s daily trading participation value.

FBM KLCI outlook: External woes to exert downward pressures
In the wake of negative external woes, KLCI’s upside potential is limited ahead of the looming general election. However, we see no immediate risk of significant reversal due to buying support from government-linked funds, driven by acceleration of the ETP announcements. Immediate resistance is historical high at 1609, followed by the weekly upper Bollinger band of 1624.

Immediate supports are 14-day SMA (1595) and mid Bollinger band (1590). A breakdown below 1590 will drive KLCI lower towards supports at the 30 and 50 day SMAs at 1586 and 1574 respectively. We reiterate that investors should take opportunity of a sideways market to top-slice and turn more defensive.

Daily KLCI - Sideways Consolidation.
FBM KLCI 16-04-2012

Weekly KLCI - Immediate Resistance Targets Near 1630 Points.
FBM KLCI 16-04-2012a

Source: HLIB Research

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