- A test of 1,698 and 1,721 targets
- Obvious supports at 1,673 & 1,687
- 1,688 resistance may cap gains
below: FBM KLCI Daily Chart (click to enlarge)
The FBMKLCI rose by 7.62 points to close at 1,688.95 on Monday. Stocks that led the index up were KLK, MAYBANK, PCHEM, IOICORP and YTL.
Technical Viewpoint: The FBMKLCI’s key swings are at 936.63 (high) and 836.51 (low). An “A-B-C” correction from the Oct 2008 low surged to the high of 1,597.08 (11 Jul 2012). Poor closes since Jul 2011 saw the index plunge to the 1,310.53 low (26 Sep 2011). The market managed to break past its previous resistances to move to a previous all-time high of 1,679.37 (29 Oct 2012), with bearish divergent signals.
Clearer direction emerged as the index fell drastically and broke its support of 1,669 in early November. We then saw a low of 1,590.67 on 28 Nov 2012. A price rise towards 1,698 and 1,721 may take place before it pauses on its first breather since the 1,590.67 low. Due to the US markets’ firmer tone on Monday night, the index may witness some buying activities at the stipulated support areas before pausing at the resistance and target levels on profit-taking.
by Maybank IB