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Mandarin Version : Market Technical Reading - Short-term Outlook Remains Positive... - 25/10/2010

Mandarin Version : Market Technical Reading - Short-term Outlook Remains Positive... - 25/10/2010

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Published by Rhb Invest
Local Market Leads:
♦ In the absence of positive trading catalysts, the FBM KLCI finished almost unchanged on Friday as investors turned
cautious and opted to lock in profits ahead of the weekend.
Local Market Leads:
♦ In the absence of positive trading catalysts, the FBM KLCI finished almost unchanged on Friday as investors turned
cautious and opted to lock in profits ahead of the weekend.

More info:

Published by: Rhb Invest on Oct 25, 2010
Copyright:Attribution Non-commercial

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10/26/2010

 
 
Page 1 of 6
A comprehensive range of market research reports by award-winning economists and analysts are exclusivelyavailable for download from
w w w .rhbinvest.com 
 
Local Market Leads:
 
 
In the absence of positive trading catalysts, the FBM KLCI finished almost unchanged on Friday as investors turnedcautious and opted to lock in profits ahead of the weekend.
 
Though Asian investors generally remained optimistic on the near-term corporate earnings announcement,regional markets ended mixed on cautious trading ahead of the weekend’s Group of 20 (G20) finance ministersmeeting in South Korea. Hang Seng fell by 0.56%, but KOSPI and Nikkei 225 ended up by 1.21% and 0.54%respectively.
 
The early weakness in the European markets further dampened sentiment and caused the FBM KLCI to close nearthe low to 1,490.64, losing 0.38 pt for the day.
 
Nevertheless, the overall trading activities remained robust, with strong rotational play on selective sectors,namely plantation, property and construction.
 
Daily volume eased to 1.23bn shares from Thursday’s 1.43bn shares. Market breadth stayed positive with 388advancers outweighing 370 decliners.
Technical Interpretations:
 
Though the FBM KLCI managed to hit a day high of 1,496.48, it registered a negative candle for the day onsustained profit-taking pressure.
 
The negative candle suggests more follow-through selling activities likely in the immediate term.
 
However, as the close was still above the supportive 10-day SMA of 1,489, we are of the view that the weaknesson the index could be limited.
 
And as long as the SMA remains supportive, the FBM KLCI will still see a good chance to rechallenge the recenthigh of 1,503.82 soon, before surging further towards the historical high at 1,524.69.
 
 
Besides the 10-day SMA, additional support can be seen at a technical gap near 1,472.32 - 1,476.05.
Chart 1: FBM KLCI DailyChart 2: FBM KLCI Intraday
 
Technical Research 
Daily Trading Strategy
Market Technical Reading
Short-term Outlook Remains Positive...
   M  a   l  a  s  i  a
   M   A   R   K   E   T   D   A   T   E   L   I   N   E
 
   P   P    7   7   6   7   /   0   9   /   2   0   1   1   (   0   2   8   7   3   0   )
 
RHB ResearchInstitute Sdn Bhd
A member of theRHB Banking Group
Company No: 233327 -M
25 October 2010
Please read important disclosures at the end of this report.
 
 
25 October 2010
Page 2 of 6
A comprehensive range of market research reports by award-winning economists and analysts are exclusivelyavailable for download from
w w w .rhbinvest.com 
 
Daily Trading Strategy:
 
Last Friday’s negative candle confirmed the previous day’s “star” candle and suggests that the FBM KLCI may riskmore profit-taking activities in the immediate term.
 
However, immediate weakness could be limited given the firm immediate support level near the 10-day SMA of 1,489. In fact, investors should view this as an opportunity to collect value stocks for a further positive push ahead.
 
And as we reiteraited, as long as the benchmark index trades and stablises near the SMA, the short-term outlookremains optimistic and the FBM KLCI is expected to retest the 1,500 psychological level and the recent high of 1,503.82 soon.
 
Beyond that, sentiment will turn even more bullish and it will lift the index towards the all-time high of 1,524.69next.
 
For a longer-term view, the index is well supported by the support near a technical gap of 1,472 - 1,476, followedby the 1,450 and the 40-day SMA of 1,462.
Source: RHBInvest & Bloomberg
Table 2 : Major Indices & CommoditiesLocal Key Indices ClosingChange(Pts)Change(%)
FBM KLCI 1,490.64 -0.38 0.0FBM 100 9,842.62 9.27 0.1FBM ACE 4,259.31 -32.93 -0.8
Major OverseasIndices
 Dow Jones 11,132.56 -14.01 -0.1Nasdaq 2,479.39 19.72 0.8S&P 500 1,183.08 2.82 0.2FTSE 5,741.37 -16.49 -0.3Hang Seng 23,517.54 -131.94 -0.6Jakarta Composite 3,597.75 9.74 0.3Nikkei 225 9,426.71 50.23 0.5Seoul Composite 1,897.31 22.62 1.2Shanghai Composite 2,975.04 -8.49 -0.3SET 992.24 3.44 0.3Straits Times 3,173.57 10.04 0.3Taiwan Weighted 8,168.06 36.83 0.5India Sensex 20,165.86 -94.72 -0.5
Major Commodities
NYMEX Crude Oil(US$/barrel) 81.69 1.13 1.4FCPO – Third Month(RM/metric ton)3,005.00 15.00 0.5
US Interest Rate Current Last Updated
Overnight Fed Fund Rate 0-0.25% Unch21 Sep2010Next FOMC meeting 2-3 Nov 2010
 Table 1 : Daily StatisticsScoreboard 18 Oct 19 Oct 20 Oct 21 Oct 22 Oct
Gainers 299 438 385 459 388Losers 468 369 408 301 370Unchanged 298 276 293 316 297Untraded 306 288 286 296 319
Market Cap
Turnover(mln shares) 1,331 1,500 1,489 1,429 1,226Value(RM mln) 1,610 1,820 1,803 1,848 1,597
Currency
MYR vs USDollar 3.1005 3.1070 3.1165 3.1045 3.1115
 
25 October 2010
Page 3 of 6
A comprehensive range of market research reports by award-winning economists and analysts are exclusivelyavailable for download from
w w w .rhbinvest.com 
 
Technical Interpretations:
 
Taking cues from mixed sentiment in the key Asian markets and the poorer opening in the European markets, theFKLI gave up its early gains by ending down in quiet trading on Friday.
 
Earlier in the day, the FKLI opened 2 pts higher at 1,497.0, near its intraday high of 1,498.0 in response to afurther rebound in the overnight US markets, but it later surrendered most of its gains in the afternoon session.
 
For the day, the FKLI for Oct contract closed down 4.50 pts or 0.30% to 1,490.50.
 
On the chart, the FKLI recorded a negative candle to signal a weaker day ahead.
 
However, as it still trades at above the supportive 10-day SMA of 1,488, any negative impact could be limited inthe immediate term, in our view.
 
And, should the SMA successfully trigger a technical rebound, the FKLI will turn back onto its recovery track toretest the recent high of 1,501.00 soon.
 
Upon removal of 1,501.00, we expect the aggressive traders to return to lift the FKLI to the all-time high level of 1,536.
 
For now, its immediate support is pegged at the 10-day SMA, followed by the medium-term supports at the 40-day SMA of 1,462 and the crucial pivotal point at 1,450.
Daily Trading Strategy:
 
Despite last Friday’s negative candle suggesting a further retreat today, we expect the 10-day SMA of 1,488 to capits immediate downside pressure.
 
And if the 10-day SMA can trigger a technical rebound, it will retest the recent high of 1,501 soon.
 
We expect the FKLI to fluctuate at between 1,486 and 1,501 today.
Table 3: FKLI ClosingsFKLI (Month)Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Oct 10 1497.00 1498.00 1487.50 1490.50 -4.50 1490.50 2907 19645Nov 10 1498.00 1498.00 1488.00 1490.00 -5.00 1490.00 532 1090Dec 10 1496.50
 
1497.50 1488.00 1488.00 -7.00 1490.00 63 377Mar 11 1494.00
 
1494.00 1488.00 1488.00 -7.50 1490.00 11 112
Source: Bursa Malaysia
 
Chart 3: FKLI DailyChart 4: FKLI Intraday

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