FBM - KLCI Rotational lower & mid-cap buying activities

FBM KLCI: Key Points
  SCOMIMR, LONBISC & LATITUD – To surge
  FBM KLCI – Temporary low seen at 1,294.39
  Obvious supports are at 1,339 & 1,352
  Key resistances seen at 1,354 & 1,370

 

Market Review
The FBM KLCI inched higher by 0.41 points to close at 1,352.23 yesterday in a mixed tradingsession. The FBM100 and FBM EMAS also closed positive marginally by 2.29 and 3.79 points respectively. Market breadth was negative however, as losers outnumbered gainers for a second day by 381 to 308 while 285 counters were unchanged. Market volume declined to 731.6m shares, valued at RM1.33b. 

 

Daily Technical Outlook
The FBM KLCI advanced less than a point, i.e. 0.41 points, to 1,352.23. Its resistance areas at 1,354 and 1,370 may cap market gains, whilst the obvious support areas for the FBM KLCI
are located at 1,339 and 1,352. Due to the USA’s benign tone last night, we will see the FBM KLCI mired in a tight range – with rotational buying activities on the lower and mid-cap stocks – especially in the consumer sector.

With the Bearish Engulfing candlestick pattern formed on 29 June, the FBM KLCI drifted down to 1,294.39 on 6 July and we sighted yet another Bullish Engulfing pattern at that level. Since then, we have broken above the previous 1,349.92 resistance level. With this, there is good potential for the FBM KLCI to test higher ground.

We advise clients to nibble on weakness on the FBM KLCI, with stop-loss at 1,337 for a short-term time frame. Some stocks that we like are:  BOLTON, COCOLND, DXN, FREIGHT, GUANCHG, HANDAL, HUPSENG, KRETAM, LATITUD, LAYHONG, LONBISC, MEASAT, OFI, QSR, SINARIA, TGUAN, TWS, UNISEM and YEELEE.

 

klci-chart

 

By Maybank Invetsment Bank

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