Showing posts from April, 2013

Bursa Malaysia: Extended Correction on Weak Momentum

Overbought blue chips and regional weakness following a weaker April PMI data from China forced  the  local  market  into extended  correction  on Tuesday.  The  KLCI  slid  6.29  points  to close near session lows at 1,700.39, off an opening high of 1,707.85, as losers beat gainers 470 to 202 on lack-luster trade of 742.4mn shares worth RM1.4bn.

Breakdown Below 1,699 to Test 1,688
Weakening technical momentum and lack of buying support implies further room for stock price  correction  from  current  levels.  A  confirmed  breakdown  below  1,699,  the  previous record high of Jan 2013, would accelerate a correction towards last Tuesday’s low of 1,688. Stronger retracement supports are at 1,658, representing the 23.6% Fibonacci Retracement  (FR) level, and 1,633, the 38.2%FR. Immediate resistance stays at the intra-day record high of 1,716, with next significant hurdle at 1,740, 123.6% Fibonacci Projection (FP) target.

SELL RHB Capital & IJM Land
RHB Capital is likely to exte…

Bursa Malaysia Rebound on Fund Support & Overnight US Strength

BUY Glomac & Mah Sing
Stocks recovered from early losses Tuesday which was sparked by concerns over China’s slower-than-expected 1Q GDP growth, after cautious  bargain hunting lifted blue chips up to close near session highs. The KLCI closed 2.76 points up at 1,700.53, off an early low of 1,688.70 and high of 1,701.26, but losers edged gainers 366 to 275 on subdued trade of 762.9mn shares worth RM1.46bn.

Support at 1,688, Resistance at 1,716
Due to buying support from local funds and rebound  on overnight US stocks, the local market should recover further on cautious bargain hunting and rotational plays. Near-term support will be from yesterday’s low of 1,688, followed by the 30-day moving average currently at 1,664. Stronger retracement supports are at 1,658, the 23.6% Fibonacci Retracement (FR) of the 1,526 low of May 2012 to the 1,699 record high of Jan 2013, with 1,633, the 38.2%FR matching the recent pivot low, providing a strong downside buffer.
Immediate resistance sta…

Parliament has been dissolved, so what’s next?

Malaysia GE13 Investment strategies
Prime Minister Datuk Seri Najib Razak has dissolved parliament to pave way for the nation’s 13th General Election (“GE”). The market experienced a roller-coaster ride after the announcement. The index fell to an intraday low of 1,632.28 from the day-high of 1,692.85 but was able to close at 1,685.40. While the day-low was way above our “Buy On Weakness” (“B.O.W.”) level of <1,600, the intraday high, however, was very much near our “Sell On Strength” (“S.O.S.”) zone of >1,695. We are still maintaining our range-bound and NEUTRAL market view for now. Our index target of 1,705 is kept unchanged. However, we shall review our market and investment strategies post the GE.

Technically speaking,  the FBMKLCI swung from the upper uptrend channel line to the lower uptrend channel line before closing almost unchanged for the day. At this juncture, the index is still capped below both the upper immediate uptrend channel line and the upper intermediate …

FBM KLCI - Weekly Market Strategy

Likely Correction Ahead
Blue chips on Bursa Malaysia registered strong gains last week, fuelled by foreign fund buying interest as they heavily underperformed global peers, which rallied on stronger-than-expected earnings and economic data. The resolution of the debt crisis in Cyprus following the Euro10 billion (RM40.5 billion) bailout by the European Union and International Monetary Fund early last week also helped improve market sentiment.

For the week, the FTSE Bursa Malaysia Composite Index (FBM KLCI) rallied 44.74 points, or 2.75 per cent) to 1,671.63, with CIMB (+47 sen), Genting Bhd (+56 sen), Axiata (+24 sen), Public Bank (+32 sen) and Maybank (+21 sen) representing more than half of the index's gain. Average daily traded volume and value slowed  to 809.7 million shares and RM1.78 billion, respectively, compared with 918.9 million  shares and RM1.63 billion the previous week.

New highs in the US equity markets and the Cyprus bailout had a spillover effect on the l…