Mar 30, 2015

FBM KLCI – Possible 1Q2015 window dressing.

Foreign volatility, local window dressing

Market Action

The FBM KLCI inched up 9.72 points WoW to close at 1,813.37, as some persistent nibbling activities were obvious throughout the week ahead of the 1Q2015 closing. Volume fell from 2.44b to 1.65b shares.


The index traded from 801.27 to 936.63 (Oct 2008 to Apr 2009), but broke above 936.63 (Wave a/B) in Apr 2009. Its Wave b/B low was 836.51. We traced out a Wave C/B (of a 3-3-5 Flat) rebound, and the extended Fifth Elliott Wave (EW) of the major Flat v/C/B-leg rise from 801.27 stalled at 1,896.23 (8 Jul 2014 all-time high). After 1,896.23, the next swing low was 1,837.28. Its next rebound stalled at 1,879.62. A swing low of 1,766.22 was then seen, but its rebound stalled at 1,858.09 (3 Nov). The index plunged to its low of 1,671.82 (Dec 2014). The rebound from that low then stalled at 1,831.41. The index held above the key 1,770 support and rose from the 1,774.30 low (16 Mar).

What is Our Strategy

The FBM KLCI’s recent rebound peaked at 1,831.41 on 4 Feb 2015, short of its 200-daily SMA. Take profit at the resistance areas of 1,823 to 1,858. The support levels of 1,774 and 1,813 will be areas to nibble.
For this current market phase ahead of the 1Q2015 window dressing, selling activities may just match off with the local buying activities. Range trade between the 1,774 and 1,831 levels. A clear market direction will emerge with a sustained break of either level.

by Maybank IB