Dec 30, 2009

KLCI breakout - sell on rally?

Bursa Malaysia shares brokeout from consolidation on Monday, helped by regional and window-dressing gains led by IOI Corp, CIMB, Maybank and Genting which lifted the index to close at a two-week high.  The FBM KLCI rose from opening low of 1,263.34 to close at the day's high of 1,272.73, gaining 8.79 points or 0.7% as 396 gainers led 215 losers on total trading volume of 459mn shares worth RM595.6mn.

The window-dressing gains had strengthened positive technical readings on daily KLCI indicators, but market breadth and buying momentum need to improve further for more sustainable upside this week.  Due to yesterday's rebound, immediate support is revised upwards to 1,260, the stronger supports are at 1,254 and 1,248.  Immediate resistance is now at 1,275,1,280 and 1,288 as subsequent tougher hurdles.

Switch to Sell on Rally CIMB, Genting Bhd, IOI Corp and Maybank on
further window-dressing gains toward their immediate upside targets, as we expect stronger profit-taking resistance to cap gains.  Any follow-through from yesterday's strong rallies on oil & gas related stocks Kencana and SapuraCrest should also see keen profit-taking and selling towards the revised resistance level at RM2.50, hence our revised call to Sell on Rally.  source: TA securities