FBM KLCI Weekly Technical Analysis
US Corporate Profit Flu Persists, But FBMKLCI Makes New High
FBM KLCI – “Sheltered from volatility”. New high of 1,671.89
CPO Futures – Downtrend still obvious despite weekly rebound
DJIA – Peaked near 13,661.87, with bearish divergence. Dispose!
above: FBM KLCi Weekly Chart (click to enlarge)
Support: 1,640 to 1,670 Resistance: 1,671
Strategy: The FBM KLCI rose 5.54 points to close at 1,671.89 last Friday. The local market rose on heavier (but selective) blue-chip rotational buying activities. Volume also remained heavier throughout the week at 1.01b to 1.44b shares.
The obvious support areas for the FBM KLCI are in the 1,640 to 1,670 zone. The key resistance level of 1,671 may see some token profit-taking activities. The FBM KLCI consolidated in a range
of 801 to 936 from Oct 2008 to Apr 2009, but broke above 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 Elliott Wave (EW) of the major Flat v/C/B-leg correction from the 801.27 low to 1,671.89 last week, with
obvious bearish divergence signals.
Poorer corporate profits ahead of the US presidential election (6 Nov) may keep American markets prone to heavy selling. As Malaysia prepares for GE13, political uncertainty could cause
investors to adopt a risk-off approach. The FBM KLCI index is in overbought and bearish divergent territory and the EW count suggests a stalling uptrend towards 1,671.89. The Malaysian bourse may witness selling around its resistance areas or towards its next modest
target of 1,683. Some BUY stocks are: AEONCR, ALAM, ANNJOO, ARMADA, DAIBOCI, DLADY, DRBHCOM, GAB, GENTING, IHH, MAS, MAYBULK, MYEG, NAIM, NESTLE, ORNA ,PASUKGB, PBBANK, PBBANK-01, PPB, RUBEREX, SYSCORP, TASEK and UOADEV.
Some SELL stocks are: AMEDIA, CANONE, CSL, IJMPLNT, MISC, PADINI and TAANN.