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Showing posts from September, 2013

Blue Chips Correct while Oil & Gas Stocks Shine

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BUY Muhibbah & TH HeavyBanks  led  blue  chips  lower  for  extended  correction  Wednesday,  dampened  by  overbought
conditions  and  uncertainties  over  the  US  Federal  Reserve’s  stimulus  bias  and  government budget  talks,  but  selective  rotational  buying  interest  on  oil  &  gas  stocks  continued  to highlight. The KLCI lost 8.42points to close at 1,784.06, off an early high of 1,791.18 and low of 1,783.15, as losers beat gainers 420 to 359 on higher trade totaling 2.21bn shares worth RM2.05bn.

Better Support at 1,772/1,768
The  daily  stochastics  sell  signal  implies  further  correction  potential  for  the  index,  likely towards 1,772, the 23.6% Fibonacci Retracement (FR) level of the 7/2/13 low of 1,597 to the  all-time  high  of  1,826,  and  next  at  1,768,  the  50  and  100-day  moving  average  levels, before stabilizing. A breakdown could see the previous 1,747-1,753 gap-up of 10 Sept being tested for support. Immediate resistance remains a…

FBM KLCI Ahead and UMNO Election Rally

The  Prime  Minister  announced  last  Saturday  that  the newly  minted  Bumiputra  Economic Empowerment  Council  will  focus  on  five  strategies  to  give  more  clout  to  bumiputra economic  empowerment  agenda.  The  announcement  that  came  as  a  reward  for  strong bumiputra support in the last 13th GE can be construed as setting the stage right to  get the ball rolling before the UMNO election on 19th October. While investors should read this as a positive  sign  for  a  market  rally  in  the  run-up  to  election,  as  was  the  case  during  the  last UMNO party election in 2009, investors’ appetite in the immediate term could be suppressed by  the  impending  outcome  of  the  US  Federal  Reserve’s  meeting  this  Tuesday  and Wednesday.

There  has  been  much  speculation  surrounding  the  Fed’s  bond  tapering,  potentially beginning this month, after chairman Ben Bernanke expressed last May that the central bank could do so later this year if economic conditi…

FBM KLCI - Sideways on Capital Outflow & Syria Worries

More Consolidation with Downward Bias
Blue  chips  were  stuck  in  range  bound  trade  last  week,  with  the  benchmark  FBM  Kuala Lumpur  Composite  Index  (FBM  KLCI)  whipsawing  as  rebound  encouraged  by  better-than expected economic numbers from major global economies failed in attracting strong  follow through  buying  interest.  Instead,  profit-taking  and selling  on  strength  checked  gains,  with concerns over sustained capital outflows from emerging markets and increased geopolitical tensions over Syria dampening market tone.

Week-on-week,  the  FBM  KLCI  slipped  3.78  points,  or  0.22%  to  1,723.8,  as  gains  on  Public Bank (+34sen) and Tenaga (+18sen) were overshadowed by losses on CIMB (-9sen), Felda Global  Ventures  (-20sen)  Petronas  Chemicals  (-12sen)  and  Sapura  Kencana  Petroleum  (-8sen). Average daily traded volume and value decreased to 1.32 billion shares and RM1.52 billion, compared to the 1.9 billion shares and RM2.5 billion respect…