FBM KLCI – Temporary support is at 1,795.
The FBM KLCI rose 4.27 points WoW to close at 1,811.92, as some minor buying activities persisted. However, volume turned down from 1.75b to 1.54b shares.
The index traded from 801.27 to 936.63 (Oct 2008 to Apr 2009), but broke above 936.63 (Wave a/B) in Apr 2009. Its Wave b/B low was 836.51. We traced out a Wave C/B (of a 3-3-5 Flat) rebound, and the extended Fifth Elliott Wave (EW) of the major Flat v/C/B-leg rise from 801.27 stalled at 1,896.23 (8 Jul 2014 all-time high). After 1,896.23, the next swing low was 1,837.28. Its next rebound stalled at 1,879.62.
A swing low of 1,766.22 was then seen, but its rebound stalled at 1,858.09 (3 Nov). The index plunged to its low of 1,671.82 (Dec 2014). The rebound from that low then stalled at 1,831.41. The index then rose from the 1,774.30 low only to stall at 1,867.53 on 27 Apr 2015. The index’s next temporary low was seen at 1,795.16 (13 May 2015).
FBM KLCI Weekly Chart
What is Our Strategy
The support levels of 1,774 and 1,811 may be areas to nibble. Liquidation at the resistance areas of 1,813 to 1,867 will cap rebounds. Sell on rallies as the index stalled at 1,867.53, with a nasty weekly Bearish Engulfing pattern in late April. The index may trade in a narrow range of 1,795 to 1,867 in the forthcoming weeks.
by Maybank IB