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Wednesday, April 1, 2009

FKLI Market Outlook 01 April 2009

FKLI Market Outlook:
US MARKETLed by the gains in Europe, the overnight DJIA secured 86 points to finish in positive territory, up 1.16%.
This meaningful finished relief us as we can maintain our call of the uptrend market, at least for short term. The rally in global equities markets was helped by the speculation that banks have more eager to lend.

With the marginal increased in overnight Dow, there is higher chance that the Dow will re-test the 8000 level. The support still remains at the 7550 level (MA 50). [Reminder: US will release its ISM Manufacturing (Survey 36 Vs Prior 35.8) & Pending Home Sales data (Survey 0% Vs Prior –7.7%) later tonight]
Green comeback for cash composite after it rose about 3.21points to ended higher at 872.55 yesterday. The gains were support by finance and construction sector which gained about 1.25% and 1.05% respectively. Total 382M shares valued at RM759M traded amid the end of 1st quarter of the year.
Meanwhile March contract gained about 4points to 871 and April contract surged about 12.5points to 875. Total volume shrinks from 19,323 to 11,327 while open interest was reduced from 59,187 to 25,432 due to final trading day for March contract. Regional market slightly recover from recent drop amid concern government stimulus plans worldwide will take longer than expected to revive the economy. The Nikkei dropped about 126 points to 8,109. HSI recovered about 119points to 13,576.
Market might expect range bound trading within 860 - 880 judging on mixed index performance on regional market and unclear market indicator based on technical. Current RSI for new spot month April is hovering at neutral zone while little negative divergence on MACD still presence, indicating bearish crossover. Immediate resistance can be seen at 877 (MA 50), followed by 880 – 885 levels, while support level would be 862 (Bollinger middle band).
In view of the overnight support in Dow, we are more optimistic in the upward movement in the FKLI for short term trading, but we remain our long-term negative bias towards the market.

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