FBM KLCI: Key Points
HARTA (Sell), PLENITU & AIRASIA (Buy)
FBM KLCI – Charging towards 1,500
Firm supports are at 1,459 & 1,475
Resistances seen at 1,479 & 1,495
Daily Technical Outlook
The FBM KLCI closed 6.30 points higher on firm buying activities to settle at 1,475.99. Its resistance areas at 1,479 and 1,495 may cap market gains, whilst the firm support areas for the FBM KLCI are located at 1,459 and 1,475.
Due to the mixed trading mode in the USA last night, we will see the FBM KLCI inch up today – with some blue chip bargain hunting movements as well as some rotational lower liner activity. Obvious profit-taking activities may trim the market’s advance. As such, trade with a relevant stop-loss on each stock for a short to medium-term time frame.
Stocks in an uptrend that we like are: AIRASIA, BJCORP, DNP, DXN, FABER, GENM, GENTING, GOODWAY, KENCANA, MASTEEL, MSC, PLENITU, SAPRES, SCIENTX, SHANG,
SIME, TWSCORP and ULICORP.
We do not like the glove-maker stocks (which are in a downtrend) and we have downgraded HARTA.
We have buys on AIRASIA and PLENITU today.
MARKET ROUNDUP
The FBM KLCI traded firmer yesterday, closing higher by 6.30 points at 1,475.99 in late afternoon buying activities. The stocks that lifted the index were GENM, GENTING, IOICORP, SIME and KLK.
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 firm buying interest would be at the support levels of 1,459 and 1,475, while some profit-taking at the resistance areas of 1,479 and 1,495 may cap any rise.
Trading opportunities had emerged with the Bullish Engulfing candlestick low at 1,243.86 on 27 May 2010. However with the Bearish Engulfing candle pattern that emerged on 29 June, the market drifted down to a fresh Bullish Engulfing candle low of 1,294.39 – seen on 6 July 2010. Due to most of the FBM KLCI’s positive signals, we believe that the FBM KLCI may still try to punch into higher territory (despite its bearish divergence indicators). Interest in the market currently is mainly on the key blue chips. Market has rotated into the mid-cap and lower liner stocks recently. The market appears healthy as a result.
by Maybank Investment Bank
