Malaysia Election Jitters Trigger Sell-down

Bursa Malaysia shares tumbled on Monday, with the benchmark blue-chip KLCI slumping 2.4% triggered by profit-taking and selling from investors on election jitters amid recent political uncertainties. The index slumped 40.81 points to end at 1,635.63, off a low of 1,630.99, with core telcos and banking stocks leading losses, as losers swarmed gainers 904 to 85 on active trade of 1.83bn shares worth RM2.61bn.

Next Support at 1,624/1,613, More Solid Support at 1,592
Yesterday’s severe sell-off on the index to close below the 50 and 100-day moving averages at 1,650 and 1,649 respectively appears grossly overdone, reflecting heavy losses on blue chips exaggerated by panic selling. Hence, any further fall towards more formidable supports from the 200-day moving average at 1,624, or 1,613, the 50%FR of the 1,526 low of May 2012 to the 1,699 record high of Jan 2013, should attract buyers to cushion downside. A more solid retracement support is at 1,592, the 38.2%FR matching the late Nov 2012 trough. Immediate resistance is revised down to 1,650, followed by 1,679.

Buy on Sharp Dips on Axiata & CIMB
Axiata should attract strong buying interest on anyfurther dip towards RM5.95 (61.8%FR), with RM5.67 (50%FR), matching the Nov 2012 low, acting as crucial support. Resistance on rebound is seen at the 30-day moving average (RM6.58), and next at RM6.87, the 4/1/13 peak. Likewise, CIMB should meet keen buyers near RM6.96 (23.6%FR), while an oversold rebound should meet resistance at RM7.56 (50%FR), with RM7.82 (61.8%FR) and RM7.91 (3/4/12 high) as heavier resistance areas.

Most Asian Stocks Fell Before BOJ Meeting
Most Asian stocks fell amid speculation shares may have risen too far, too fast, with Japan's Nikkei falling amid caution before this week's Bankof Japan policy meeting and on profit-taking after the index Friday posted its biggest one-day point and percentage gain since March 2011. Investors were cautious before the outcome of the Bank of Japan's two-day policy meeting on Tuesday. The central bank is widely expected to undertake a series of fresh monetary easing measures to more closely align itself with the government's policy demands including the adoption of a 2.0% inflation target and an additional 10 trillion yen in
asset purchases.

 

by TA Securities

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