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FBM KLCI Weekly Technical Analysis 1308

All markets inching up to new highs
  FBM KLCI – Inching up to re-test 1.647.94
  CPO Futures – Plunging towards MYR2,838 & MYR2,754
  DJIA – A re-test of the 13,338.66 resistance
  TDM – Firm double daily and weekly downtrends

FBM KLCI Weekly Chart (click to enlarge)

fbm klci

 

Support: 1,609 to 1,645 Resistance: 1,647
Strategy:  The FBM KLCI rose 11.99 points to close at 1,645.36 last Friday. The local market rose on minor blue chip nibbling activities late last Thu and Fri. Volume remained range bound from 0.88b to 1.41b shares. Intra-day price action was boring and treaded water to minor positive
closes, especially last Thu and Fri.

The obvious support areas for the FBM KLCI are in the 1,609 to 1,645 zone. The next resistance level of 1,647 may witness some profit-taking activities. The FBM KLCI consolidated in a range of
801 to 936 from Oct 2008 to Apr 2009, but broke above its resistance of 936.63 (Wave a/B) in Apr 2009 and surged to a previous all-time high of 1,597.08 on 11 Jul 2011. 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.

We have revised our Wave Count of a Wave iv/B correction to 1,310.53, and the extended Fifth Wave stalled initially at 1,609.33 of the major Flat v/C/B-leg correction  from the 801.27 low. From the 1,526.60 low, we have traced out an extended Wave V/V Flat pattern that stalled at 1,647.94, with abundant bearish divergence signals.

As Malaysia prepares for GE13 in the coming months, political uncertainty could cause investors
to adopt an eventual risk-off approach. The FBM KLCI index is in overbought and bearish divergent weekly territory and the Elliott Wave count suggests a stalled uptrend near 1,647.94.
Further forays of the index above 1,647.94 would be great opportunities to take profits on rallies.

Some trading buy stocks that we like are:  AHEALTH, BRIGHT, DIGI, E&O, ECM, HLFG, HIBISCS, KLCCP, ORIENT, PENERGY, PETDAG, PRLEXUS, POS, PWROOT, SBCCORP and ZHULIAN. Some stocks on which we advocate a SELL are: ARMADA, CYBERT, GENM, GENP,
GENTING, JTIASA, KNM, MISC, MRCB, MSC, PATIMAS, SIME and TDM.

 

by Maybank IB