Bursa Malaysia: Liquidate On Rally by MIB

A very jerky and stilted rebound to sell into

    FBM KLCI: Key Points

    • KIANJOO – May surge further

    • FBM KLCI – A stilted rebound to sell into

    • Obvious supports are at 1,500 & 1,523

    • 1,526 & 1,544 resistance levels will cap

     

    Market Review The FBM KLCI rose 8.29 points to 1,525.85 yesterday, as bargain-hunting activities lifted the index from the morning’s low. The FBM 100 also gained by 32.84 points and the FBM EMAS added 24.41 points. Market breadth was again quite negative, as he gainer-to-loser ratio was 259 to 639 while 238 counters were unchanged. Market volume traded was 1.84b shares - valued at RM2.06b.

     

    Daily Technical Outlook The FBM KLCI rebounded strongly by gaining 8.29 points to 1,525.85 yesterday. Its resistance areas of 1,526 and 1,544 will cap market gains, whilst the obvious support areas are located at 1,500 and 1,523. The FBM KLCI has temporarily stalled at its new all-time high of 1,576.95 on 6 January 2011. Since then, the index has moved into a new 2011 low of 1,490.44 recently. We anticipate the index to remain volatile in the short term and bearish in the medium term. As a result, very short-term trading is the key to the markets.


    We suggest clients liquidate on rallies and remain more in cash (or in price defensive counters). Heavy foreign selling in the Asia-Pacific region and in Malaysia could be the next obvious major investment move on any significant regional rebound. Due to the lower European markets last night; we may see the FBM KLCI in a stilted and stunted rebound posture today. Some stocks to sell on rallies and avoid are: AMMB, BORNOIL, GUANCHG, HWGB, IOICORP, MEGB, MISC, OLYMPIA, PBBANK, TANCO and UNISEM, Uptrend stocks we like are: ANNJOO, BPPLAS, CBIP, COASTAL, FIMACOR, KEN, KFC, KIANJOO, KWANTAS, MFLOUR, MITRA, NAGAMAS, PCHEM, SCIENTX, SEG, TENAGA and TWS.

     

    by Maybank Investment Bank

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