FBM KLCI: Key Points
FBM KLCI – Temporary low at 1,243.86
Obvious supports are at 1,315 & 1,335
Key resistances seen at 1,340 & 1,350
Daily Technical Outlook
The FBM KLCI advanced 17.60 points to close at 1,335.29. Its resistance areas at 1,340 and 1,350 may cap market gains, whilst the obvious support areas for the FBM KLCI are located at 1,315 and 1,335. Due to the USA’s marginally weaker market action overnight, we could see the FBM KLCI in a range-trading mode today – with some minor upside bias. The FBM KLCI had peaked at its previous high of 1,349.92. Trading opportunities hen emerged with the Bullish Engulfing candlestick low at 1,243.86 on 27 May 2010. Investor confidence has returned to he local market but we advise clients to remain cautious.
Some stocks that we like are: AFG, BSTEAD, CCB, CIMB, COCOLND, EPIC, GUINESS, HELP, HLFG, KFC, KLK, KPJ, MAMEE, PBBANK, PBBANK-01, PPB, POS, PUNCAK, QL, SEG, SUPERMX, TOPGLOV, UTDPLT and ZHULIAN.
MARKET ROUNDUP
The FBM KLCI advanced by 17.60 points to close at 1,335.29. The stocks that led the rise were PBBANK, CIMB, MAYBANK, SIME and IOICORP.
Technical Viewpoint: The FBM KLCI’s key swings are 936.63 (Wave 4A high) and 836.51 (Wave 4B low). Its extended “Flat” uptrend Wave 4C move stalled at 1,349.92 (4 May 2010, high). An “A-B-C”-correction then unfolded and ended at 1,243.86 (27 May 2010). Some obvious buying interest would be at the support levels of 1,315 and 1,335, while liquidation at the resistance areas of 1,340 and 1,350 may cap any rebound.
Trading opportunities have emerged with the Bullish Engulfing candlestick low at 1,243.86 on 27 May 2010. Trade with a 1-month timeframe, with stop-loss below 1,313. The FBM KLCI’s signals are positive and the market looks poised to re-test its previous high of 1,349.92. Should that happen, its first initial target above 1,349 is 1,385; to be followed by 1,407. We prefer buying liquid and laggard stocks on the exchange. Trade with a relevant and tight stop-loss, in case the global markets take a tumble (like the massive May 2010 fall).
KLCI Futures reading: The June contract moved into a larger 6.21-point premium to the FBM KLCI. Traderswill trade the KLCIF today with a “Buy on Dips” bias. The obvious support areas are at 1,320.0 and 1,341.0,and investors may take profit at the 1,342.0 and 1,353.0 resistance areas.
by Maybank Investment Bank
