Persistent selling pressure on Maybank, Public Bank and Resorts sent the KLCI lower by nearly 12 pts yesterday. The selling pressure is expected to accelerate once the immediate support at the 835 pt-level was violated. As the 50-day MAV line, which coincides with the short-term uptrend line, has been violated we are eyeing the October ’08 level of 801 pts as the downside target. Our bearish view towards the near-term market is maintained.
Overnight, the key indices on Wall Street rallied more than 4%, providing the market a solid follow through from Tuesday’s more than 5% gain. The session’s positive tone was inspired by better-thanexpected retail sales data and buying interest in financial stocks, despite the weekly jobless claims rising more than expected. Today, the KLCI might be able to sustain a posture at above the 835 ptsupport level. However, be prepared for more aggressive selling at below the support level.
To the upside, look for an immediate resistance at the 860-867 pt-area followed by the 50-day MAV line, which is now situated at the 890 pt-level.Following up our update on Maybank on Mar 3, ’09, the selling pressure on Maybank did accelerate after the critical support level of RM4.74 was taken out. Surprisingly, not even the RM4.50 strong support could contain the selling pressure last Friday as the level was violated immediately the subsequent trading day. Even more surprising is that another strong support of RM4.15 was violated with ease yesterday. It looks like Maybank will likely retrace towards the RM3.80 support level.
However, the strongest support is only seen at the RM3.55 level, or the beginning point of the 2000-2007 rally. From the current level, look for an immediate resistance at the RM4.34 level, followed by the RM4.50-RM4.54 area and the RM4.74 level.HAPPY INVESTING
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