KLCI & FKLI TODAY 240209
The Asian market closed in mix note after Dow futures rebounded on nationalization of CitiGroup Inc. lead to reducing the risk of bank failures. KLCI eased 1.88 pts or -0.21% to settle at 887.83, STI gained 37pts or +2.33%, HSI added 475 pts or +3.75% while Nikkei 225 shed 40 pts or -0.54% on financial services company SFCG filed for bankruptcy protection. Meanwhile, the FKLI gained 6 pts or +0.68% to settle at 884. The basis narrowed to 3 pts discount from 11 pts against cash. Given the weak momentum reading on RSI-14 days at 48 and unable to sustain above SMA 20 at 885, we expect the market to have further downside potential.
In addition with overnight loss in Dow Jones, sentiment would be further weakened today and lead to more sell off on shares, recent performance in US and regional market is giving more pressure on KLCI. While economists in different financial institutions in Malaysia are giving various 2009 GDP growth forecast for Malaysia to be 1-3.5%, market is fundamentally weak and hence doesn’t give much chance for upside. Investors may Short at 890 level, more downside is expected if breach the support level at 870.
In addition with overnight loss in Dow Jones, sentiment would be further weakened today and lead to more sell off on shares, recent performance in US and regional market is giving more pressure on KLCI. While economists in different financial institutions in Malaysia are giving various 2009 GDP growth forecast for Malaysia to be 1-3.5%, market is fundamentally weak and hence doesn’t give much chance for upside. Investors may Short at 890 level, more downside is expected if breach the support level at 870.
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