The FBM KLCI gave up another 4 pts or so yesterday, which means that the index has lost about 25 points over the last two sessions. Compared to the about 45-pt gain recorded on the first week of 2011, this means that the index has shed more than 50% of its gains.
As we mentioned yesterday, the index staged a minor breakdown last Friday but we are not sure if this breakdown would lead to major damage in the following weeks. We have been using uptrend line 1 as our guidance on the market’s near-term outlook. As the index is now trading just above uptrend line 1, one or two rounds of heavy selling pressure on the index’s component stocks would cause significant damage to the market’s near-term outlook. This is because the FBM KLCI has been trending up rather steadily at above uptrend line 1 since May last year.
Anyhow, we continue to view the market action within the uptrend channel as insignificant as we would expect the FBM KLCI to scale up in the near term as long as it maintains a posture within the channel.
After last Friday’s breakdown, we no longer view the market’s consolidation of the first week’s massive gains as constructive. Immediate support is still seen at the 1,532 pt-level, or the previous historic high, while next support is detected at the 1,500 pt-psychological mark. Immediate resistance is situated at the 1,558 to 1,567-pt downside gap created last Friday. The 1,577 pts historic high is naturally the next resistance for the index.
As we mentioned yesterday, the index staged a minor breakdown last Friday but we are not sure if this breakdown would lead to major damage in the following weeks. We have been using uptrend line 1 as our guidance on the market’s near-term outlook. As the index is now trading just above uptrend line 1, one or two rounds of heavy selling pressure on the index’s component stocks would cause significant damage to the market’s near-term outlook. This is because the FBM KLCI has been trending up rather steadily at above uptrend line 1 since May last year.
Anyhow, we continue to view the market action within the uptrend channel as insignificant as we would expect the FBM KLCI to scale up in the near term as long as it maintains a posture within the channel.
After last Friday’s breakdown, we no longer view the market’s consolidation of the first week’s massive gains as constructive. Immediate support is still seen at the 1,532 pt-level, or the previous historic high, while next support is detected at the 1,500 pt-psychological mark. Immediate resistance is situated at the 1,558 to 1,567-pt downside gap created last Friday. The 1,577 pts historic high is naturally the next resistance for the index.
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