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):

fbm klci weekly

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

Popular posts from this blog

Malaysia Inflation to start easing end-3Q or early 4Q2011

Trump’s Win – Bark Worse Than Bite?

FBM KLCI Technical Outlook