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Weekly Technicals - Malaysia inches to new all-time highs

FBM KLCI – Inching up into uncharted territory

FBM KLCI Weekly Chart (click to enlarge)

fbm klci weekly technical

 

Support: 1,600 to 1,626 Resistance: 1,632

Strategy: The FBM KLCI inched up 5.83 points to close at 1,626.38 last Friday. The local market rose on moderate buying activities last week. Volume remained steady and ranged from 1.13b to
1.34b shares.

The obvious support areas for the FBM KLCI are in the 1,600 to 1,626 zone. The next resistance level of 1,632 may see some token liquidation activities. The FBM KLCI consolidated in a range of 801 to 936 from Oct 2008 to Apr 2009, but broke above its resistance of 936.63 (Wave a/B) in Apr 2009 and surged to a previous all-time high of 1,597.08 on 11 Jul 2011. 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. We have revised our Wave Count of a Wave iv/B correction to 1,310.53, and the extended Fifth Wave stalled initially at 1,609.33 of the major Flat v/C/B-leg correction from the 801.27 low. From the 1,526.60 low, we may be tracing out yet  another extended Wave V/V Flat pattern. Bearish divergence is still abundant and profit-taking on rallies may persist.

As Malaysia prepares for GE13 in the coming months, political uncertainty could cause investors
to adopt an eventual risk-off approach. The FBM KLCI index is in overbought and bearish divergent weekly territory and the Elliott Wave count suggests temporary bullishness and an attempt to move above 1,620.55 to fresh target highs (like 1,650 and 1,683). Local index support
may maintain a good  technical picture for the next large upcoming IPO, IHH. However, as the index makes new highs, there are opportunities to take profits on rallies. Some interesting  “Buy”
stocks are:  AFFIN, APEX, BRDB,  GAB,  HINGYAP,  MALTON,  MAXIS,  MBFHLDG,  MEDIAC, MISC, MWE, OLDTOWN,  ORIENT, PADINI, REDTONE, TAKAFUL, TM, TOPGLOV, UMLAND,
WEIDA and YINSON

 

by Maybank IB