The FBM KLCI gapped down by nearly 9 pts at the opening yesterday but also made an attempt to bounce back. After hours of struggling to move up, the index finally eked out a 0.97-pts gain and also closed slightly above the much talked about 1,505 pt-level.
From yesterday’s market action, we believe no one can tell for sure if it was a decisive return back above the 1,505 pt-level. Anyhow, whether the previous major recent-low of 1,505 has been convincingly violated or not is no longer much of concern to us. Our focus is now on the lower high which has been created at below the uptrend line. This is because having created a lower high, there is a possibility that the index may start creating a downtrend channel and eventually retrace to the next key low of 1,474 pts.
We maintain our Neutral view towards the near-term market. In the meantime, while it does look like the index might be creating a downtrend or a downtrend channel, it is still too early to confirm this statement.
From the current level, there is immediate support at the 1,500 pt-level, followed by the 1,474 ptlevel. Although the index closed slightly above the 1,505 pt-level, we still view this level as the immediate resistance. We would still want to see if the index can return back above the 1,505 pt-level on strong upward momentum while next resistance is seen at the 1,524-1,536-pt area.
From yesterday’s market action, we believe no one can tell for sure if it was a decisive return back above the 1,505 pt-level. Anyhow, whether the previous major recent-low of 1,505 has been convincingly violated or not is no longer much of concern to us. Our focus is now on the lower high which has been created at below the uptrend line. This is because having created a lower high, there is a possibility that the index may start creating a downtrend channel and eventually retrace to the next key low of 1,474 pts.
We maintain our Neutral view towards the near-term market. In the meantime, while it does look like the index might be creating a downtrend or a downtrend channel, it is still too early to confirm this statement.
From the current level, there is immediate support at the 1,500 pt-level, followed by the 1,474 ptlevel. Although the index closed slightly above the 1,505 pt-level, we still view this level as the immediate resistance. We would still want to see if the index can return back above the 1,505 pt-level on strong upward momentum while next resistance is seen at the 1,524-1,536-pt area.
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