The FBM KLCI was stuck in a rut yesterday and continued to face a tough hurdle at the 1,338 pt-level, which is the “Neckline” of the modified “Head and Shoulder” detected in 2008. From the above daily chart, we can see that the key index has started to move sideways. Anyhow, there is a still potential of the key index developing a new short-term uptrend line. The market would have to surpass the recent peak of 1347.6 pts in order to complete this uptrend line.
We are still bullish on the near-term technical outlook of the FBM KLCI. Similarly, for the longer term outlook, it is obvious that the key index - which has kept on creating new highs during the 2009-2010 rally - is still trending higher in robust fashion along a longer-term uptrend.
Once again, look for the 1,338 pt-level as the immediate resistance. The 1,344-1,358 pt area, which is the “Downside Gap” created by the market in early 2008, is now the second resistance. On the other hand, the previous peak of 1,334 pts has now become the market’s immediate support. Another support is seen at the 1,300-pt psychological mark.
OSK Research
