FBM KLCI - After The Mini-Rise Comes The Next Drop
KLCI minor rebound rise is over. Look out for the next decline
below: FBM KLCI Weekly chart (click to enlarge)
Support: 1,590 to 1,624Resistance: 1,626 to 1,699
Strategy: The FBM KLCI inched down 0.75 points on a WoW basis to close at 1,626.89 last Friday. The market fell on lacklustre trading activities. There was muted market response to the
positive ETP and BNM reports. Volume ranged from 0.76b to 1.20b shares traded.
The weaker support areas for the FBM KLCI are in the 1,590 to 1,624 zone. The key resistance levels of 1,626 and 1,699 will see some heavy liquidation activities. The index consolidated in a range of 801 to 936 from Oct 2008 to Apr 2009, but broke above 936.63 (Wave a/B) in Apr 2009.
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. The current extended Fifth Elliott Wave (EW) of the major Flat v/C/B-leg correction from the 801.27 low to 1,699.68 (on 4 Jan 2013) has obvious bearish divergence signals despite the index’s rise to uncharted levels.
As Malaysia prepares for GE13 over Apr-Jun 2013, political uncertainty could cause investors to
adopt a risk-off approach. The FBM KLCI is in overbought and bearish divergent territory and the
EW count suggests a stalled uptrend at 1,699.68 and secondary high of 1,664.39, which is the right shoulder of the Head and Shoulder Top pattern. Some BUY stocks are: BIMB, BOLTON,
URSA, CARLSBG, HAPSENG, IBHD, ORIENT, POS, PRTASCO, SCIENTX, TASEK, UOADEV and UZMA. Some SELL stocks are: ARMADA, BENALEC, CMSB, CYPARK, DIALOG, DIGI, DRBHCOM, FGV, GENM, GENP, HLBANK, HUATLAI, INCKEN, IOICORP, MBMR, PARKSON, PENERGY, PPB, STAR, SUPERMX, TOPGLOV, YTLPOWR and ZHULIAN