Apr 30, 2010

MALAYSIA KLCI - Technical Analysis

The FBM KLCI moved up 2.69 points from its open to close at 1,335.86. The stocks that rose were GENTING, GENM, MAYBANK, AXIATA and DIGI.



Technical Viewpoint: The FBM KLCI’s key swings are 936.63 (Wave 4A high) and 836.51 (Wave 4B low). Its extended “Flat” uptrend Wave 4C move stalled at 1,308.52 (21 January 2010). The next key swings were at 1,224.37 (9 February 2010, low), 1,334.34 (11 March 2010, high) and 1,292.21 (22 March 2010, low). Some obvious buying interest would be at the support levels of 1,322 and 1,335, while some profit-taking at the resistance areas of 1,337 and 1,347 will cap any rebound.

The recent price rise had stalled at 1,347.61 (7 April 2010). Obvious bearish divergence indicators are causing investors to liquidate in all the FBM KLCI rebound rallies. The overbought and negative CCI, DMI
and MACD signals will be a further reason for investors to sell. Last Monday’s sell-down appeared to have stalled just above the 1,320-level. As such, some minor bargain-hunting activities may emerge due to some positive chart buy signals. We recommend that investors take on a very short-term investment horizon and make swift profits. We foresee an initial rise today but that could be followed by liquidation activities later.

by Maybank Investment Bank