Bursa Malaysia - Sentiment Damper From Potential Fed Tapering
SELL AMMB & RHB Capital
Blue chips fell into profit-taking correction mode on Monday, but lower liners and smalls cap stocks continued to attract strong rotational trading interest. The KLCI lost 9.88 points to end at 1,778.36, off an early low of 1,771.65 and high of 1,788.43, as losers beat gainers 515 to 339 on extremely heavy trade of 3.15bn shares worth RM2.44bn, with trading on MAS consisting nearly a third of the total volume.
Support at 1,772, Next at 1,756
The weak technical picture on the blue-chip index, clouded further by external weakness due to potential tapering of bond purchases by the US Federal Reserve next month, should dampen near-term sentiment. Immediate support stays at 1,772, the 23.6% Fibonacci Retracement (FP) of the 7/2/13 low of 1,597 to the all-time high of 1,826, with stronger supports coming in at 1,756, the rising 100-day moving average level, and 1,738, the 38.2%FR level. The 25 June low of 1,723 would act as an important pivot support. Immediate resistance remains at the 1,800 psychological level, with next hurdle at 1,814, the 150% Fibonacci Projection (FP) of the 1,526 pivot low of18 May 2012 to this year’s 30 April high of 1,718. The next resistance would be at the all-time high of 1,826 of 6 May.
SELL AMMB & RHB Capital
AMMB could decline further on bearish momentum, with breakdown below the lower Bollinger band to re-test RM7.60 (76.4%FR) support,while RM7.28 (61.8%FR) would act as stronger retracement support. Resistance is at RM8.12, the 15/8/13 high. Similarly, RHB
Capital may slide further to test RM7.85 (76.4%FR) support, while a breakdown would challenge lower chart supports at RM7.70, RM7.55 and RM7.40 going forward. Significant
resistance is likely at RM8.44, the 61.8%FR.
Asian Stocks Subdued Before Fed’s Policy Meeting
Asian stocks mostly wavered between gains and losses Monday ahead of U.S. Federal Reserve minutes to be released Wednesday that may give further clues on when the central bank might cut back on its easy monetary policy. The subdued start to trading in Asia comes amid ongoing speculation over when the U.S. Federal Reserve will begin to wind down its $85 billion-a-month bond buying program. Many observers expect the central bank to make a decision on the program at a key meeting of Federal Reserve policy makers next month. Japan's Nikkei share average rose on Monday as investors found buying opportunities in oil companies on rising oil futures, but trading was subdued as the market was focused on the inutes of the U.S. Federal Reserve's July policy meeting this week for more cues on when it will likely start tapering the stimulus. Meanwhile,Hong Kong and China shares slipped, as Chinese developers fell due to renewed concerns Beijing may take further steps to cool the market after Beijing and Shanghai's July home prices posted their fastest annual growth this year. The Hong Kong Index inched down by 54.11 points or 0.24% to 22,463.70 while the Singapore’s Straits Times Index lost 24.20 points or 0.76% to 3,173.33.
by TA Securities