KLCI Technical Reading Summary
Technical indicators for the FBM KLCI have turned bullish following the strong windowdressing surge on blue chips last week, with a fresh daily stochastics buy signal and daily MACD poised to trigger a buy supporting further upside momentum. However, investors should be aware that window-dressing buying may peak on 31 December, hence profit-taking correction could follow in the first few trading days for 2014. As such, investors should look ahead to take profits on blue chips which will be overbought on further gains.
above: FBM KLCI Weekly chart (click to enlarge)
As for the index, immediate support is upgraded to the rising 10-day moving average currently at 1,843, followed next by the 30-day moving average at 1,823, close to 1,822, the October high resistance-turn-support level, with stronger support cushion from the 50-day
moving average now at 1,816 (see the Chart above ). The 100-day moving average at 1,790 acts as a strong support buffer. Immediate resistance will now come from 1,880, the 123.6% Fibonacci Projection (FP) of the rally from 1,597 low of February to the May high of 1,826. The subsequent hurdle would be 1,913, the 138.2%FP.
Stock-wise, we would recommend investors take profits on further window-dressing strength in index heavyweight blue chips such as AMMB Holdings, Axiata, CIMB, Genting Bhd, Maybank, RHB Capital, Tenaga and TM ahead of potential year-end profit-taking correction
by TA Securities