Overnight US Rally to Spillover

Bursa Malaysia blue chips fell on the first trading day of 2013 due to post window-dressing profit-taking, offsetting strong regional gains after the US government passed a budget bill to avert the so-called fiscal cliff and China’s manufacturing sector rose a third month. The KLCI slumped 14.23 points, or 0.8% to end near the day’slow at 1,674.72, off an opening high of 1,685.15, but gainers edged losers 373 to 335 on slightly better trade totalling 874.5mn shares worth RM1.19bn.

Immediate Hurdles at 1,688 & 1,700
The overnight rally in key US and European stock markets should spill-over to the region today, filtering down to the local market as investors return after the year-end holidays. Hence, despite yesterday’s slump, near-term downside for the index should be well-cushioned by the 10-day moving average, which has risen to 1,671, while the 50-day moving average at 1,645 provides a more solid uptrend support. Meanwhile, immediate resistance would be at last year-end’s record high of 1,688.95, followed by 1,700, 1,715 and 1,738 next, which are the respective 123.6% and 138.2% Fibonacci Projection (FP) levels.

SELL AMMB & Petronas Chemicals
Nonetheless, a fresh hook-down sell signal on the daily stochastics for AMMB point to near-term correction towards the 10-day moving average (RM6.64), with stronger supports at the 30-day (RM6.50)and 50-day (RM6.42) moving averages  in case of a breakdown. Likewise, overbought momentum and daily stochastic sell signal on Petronas Chemicals implies further near-term downside risk towards RM6.08, the30-day moving average matching the mid Bollinger band, before buying support re-emerge.

 

by TA Research

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