Expect Rebound on Overnight US Strength Stocks fell on Wednesday, dragged down by heavy regional losses on concern credit-rating downgrades of Greece and Portugal will dampen the global economic recovery, but ended off early lows on bargain hunting interest. The FBM KLCI rose from an early low of 1,324.34 to settle at 1,333.17 to lose 6.55 points or 0.5% for the day, off a high of 1,335.95, on less negative breadth as losers beat gainers 472 to 236 on slower trade of 831.1mn shares worth RM1.12bn.
Immediate Resistance at 1,340, Then 1,344/1,347
As we had expected, limited foreign participation cushioned downside and hence the local market fell less than regional peers yesterday, with the 1,320 support never in danger of being challenged at the low point of the day. While the overnight rebound on Wall Street should see buyers coming back to support a rebound today, expect immediate resistance at recent high of 1,340, and higher hurdles at 1,344, the previous two week’s high, and then 1,347, the 7 April pivot high.
BUY MRCB & Jaks Resources for Rebound
Most blue chips should stage a mild rebound today as buying momentum turned more cautious given the recent correction on foreign markets, but rotational plays should return to highlight lower liners again. Stocks on focus today are MRCB and Jaks Resources, which should rebound from recent losses given the low readings on technical momentum indicators, and share price cushioned by support from the lower Bollinger band.
by TA Securities
