KLCI - Malaysia Is Stable But The World May Be Volatile

FBM KLCI – Stable and strong despite global volatility

above: FBM KLCI Weekly Elliot Wave Chart (click to enlarge)

 

Support: 1,718 to 1,775 Resistance: 1,778 to 1,826

Strategy:  The FBM KLCI inched up 6.37  points WoW on local buying to close at 1,775.59 last Friday amid global and regional turbulence. Volume ranged from 1.58b to 2.31b shares traded. The wider support areas for the FBM KLCI are in the 1,718 to 1,775 zone. The key resistance levels of 1,778 and 1,826 will see some heavy liquidation  activities. The index consolidated in a
range of 801 to 936 from Oct 2008 to Apr 2009, but broke above 936.63 (Wave a/B) in Apr 2009. Its intermediate Wave b/B low was 836.51. We have traced out a Wave C/B (of the Flat 3 -3-5 variety) rebound phase, and revised our Wave Count of a Wave iv/B correction to 1,310.53. The current extended Fifth Elliott Wave (EW) of the major Flat v/C/B-leg correction from the 801.27 low to 1,826.22 (on 6 May 2013) has obvious bearish divergence signals despite the index’s rise to all-time highs on a gap-up move  after GE13. The FBM KLCI is in overbought and bearish divergent territory and the EW count suggests a stalling uptrend towards 1,826.22.

This could cause investors to  continue to adopt a trading strategy and bargain-hunt for selective laggard stocks. Local investors will likely trade with a short-term time frame as they may need to react swiftly to potentially weaker and volatile world and regional markets. Some BUY stocks are:  AMBANK,  BAHVEST,  CANONE,  CENBOND, CENTURY,  CMSB,DSONIC,  FABER,  FARMBES,  GAB, GOB, HAPSENG, HLCAP, ILB, KIANJOO, KIMLUN,MMCCORP,  MYEG,  NHFATT,  PESTECH,  POS,  PRESBHD, PRKCORP,  PRLEXUS, PTARAS,  RVIEW,  SCIENTX,  SUPER, TAKAFUL, TOPGLOV  and  UZMA.  Some SELL stocks are BAT, HLFG, KLK, MHB and YTLE

 

research by MIB

Bursa Malaysia - Lower Liners Strength Lift Market

Technical Buy On TRC Synergy & WCT

Bursa Malaysia shares reversed earlier losses to edge into positive territory yesterday, with strong buying interest lifting lower liners and small cap stocks, in tandem with key regional markets which turned higher in spite of little overnight news flow from outside of the region to influence trading in Asia. The KLCI gained 9.03 points to close at 1,776.16, off an early low of 1,765.94 and high of 1,779.64, as gainers edge losers 633 to 239 on robust trade totaling 2.58bn shares worth RM2.75bn.

Resistance at 1,791 & Support at 1,765
As for the index, immediate resistance is seen at 1,791, representing the 138.2% Fibonacci Projection (FP) of the 1,526 low of May 2012 to the1,718 high of April 2013, with 1,814, the subsequent  150%FP,  and  the  record  high  of  1,826  providing  stronger  resistance.  Support
for the index remains at last week’s low of 1,765,  followed by the pivot lows of 1,752 of 10 May and 1,743 of 6 May, while the 1,718 to 1,743 gap will act as a critical support platform.

 

Buy TRC Synergy & WCT
TRC Synergy could accelerate further to challenge the upper Bollinger band (RM0.66), with a confirmed breakout to target the 61.8%FR (RM0.68)and the peak of 09/02/12 (RM0.79), going forward. Key retracement support is at the 23.6%FR (RM0.56). Meanwhile, any pullback  on  WCT  towards  the  76.4%FR  (RM2.51)  would  be  a good  buying  opportunity  for upside towards the upper Bollinger band (RM2.74) orthe peak of 20/05/13 (RM2.78), with higher profit target seen at the 123.6%FP (RM2.96) ahead.

 

by TA Securities