FBM KLCI Weekly Technical Analysis 0411
Bursa Malaysia FBM KLCI Weekly Technicals
Downside volatility may still beckon
FBM KLCI – Still looking quite weak.
CPO Futures – Peaked at RM3,967. Remain mega-bearish.
DJIA – Dow looks to peak quite soon too.
NAIM – The beginning of further weekly downside for this stock.
Support: 1,474 to 1,517
Resistance: 1,521 to 1,576
Strategy: The FBM KLCI plunged 35.55-points and closed at 1,521.94 last Friday. The local market sold-off ahead of the Sarawak state elections on 16 April. The obvious support areas for the FBM KLCI are located in the 1,474 to 1,517-zone. The firm resistance zone of 1,521 and 1,576 will see heavy liquidation activities.
The FBM KLCI had previously consolidated in a tight range of 801 to 936 from October 2008 to April 2009, but broke above its resistance of 936.63 on 10 April 2009 and surged to a fresh all-
time high of 1,576.95 on 6 January 2011. In terms of Elliott Waves, the FBM KLCI traced a broad
Wave a/B consolidation phase to the 936.63 high. Its Wave b/B low was 836.51. We have traced
out a Wave c/B (of Flat 3-3-5 variety) rebound phase. Bearish divergence signals are obvious on
the FBM KLCI’s indicators despite the index’s surge to its all-time high of 1,576.95 (c/B).
Despite the BN win in the Sarawak state election, the local market does not look good in the short to longer-term. Most of the stocks in the market are in grossly overbought territory with bearish divergence on a lot of its chart indicators. The local market is clearly in a distribution mode before the next massive mark-down phase. Investors will remain sellers on any rebound rallies.
Uptrend stocks that we like are: AEON, BOXPAK, HARTA, HIRO, KIANJOO, MBSB, F&N, SBCCORP and YTL. Down-trend stocks that we advocate a sell are: AMMB, BURSA, CYPARK,
DAYANG, DIGI, GAMUDA, IOICORP, LINGUI, LIONIND, IJM, NAIM, PACMAS, PROTON, SIME, TCHONG, TENAGA, TWS, UEMLAND, UMW and WTK.
by Maybank IB