FBM KLCI – Going on its merry way despite the Dow’s drop
Support: 1,723 to 1,788 Resistance: 1,790 to 1,826
FBM KLCI Weekly Chart (click to enlarge):
Strategy: The FBM KLCI rose 8.92 points WoW on minor nibbling activities to close at 1,788.24
last Friday despite global volatility. Volume ranged from 1.59b to 2.42b shares traded.
The index 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. 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, and revised our Wave Count of a Wave iv/B correction to 1,310.53. The current extended Fifth Elliott Wave (EW) of the major Flat v/C/B-leg correction from the 801.27 low to 1,826.22 (on 6 May 2013) has obvious bearish divergence signals despite the index’s rise to all-time highs on a gap-up move after GE13. The FBM KLCI is in overbought and bearish divergent territory and the EW count suggests a stalled uptrend at 1,826.22. This could cause investors to adopt a short-term trading strategy between 1,723.74 (Jun 2013 low) and 1,826.22 (May 2013 high). From the last two swing movements (1,723.74-1,811.65), the index seems to have found support at the 50% FR level of 1,766.70.
The obvious support areas for the FBM KLCI are in the 1,723 to 1,788 zone. The key resistance
levels of 1,790 and 1,826 will see some profit-taking activities. The index may remain range bound within the confines of the 1,723.74 and 1,826.22 levels despite global volatility.
Some BUY stocks are: AIRPORT, APM, CRESBLD, DSONIC, FLONIC, GHLSYS, GUNUNG,
HOHUP, KARYON, LATITUD, LBS, OCK, PRTASCO, PTARAS, RUBEREX, SCABLE, SERSOL, SUMATEC, TEKALA, TGOFFS, TNLOGIS, UZMA and ZHULIAN. Some SELL stocks are: AFG, CARLSBG, CIMB, GENP, IJM, JOHOTIN, LPI, MBMR, MISC, NESTLE, PHARMA, SHANG, STAR, UEMS and UTDPLT.
by Maybank IB