ZLBT Chats

Tuesday, April 7, 2009

FKLI Market Outlook 07 April 2009

Overnight DJIA slid slightly, closed marginally below the 8000 level. The DJIA down 41 points, -0.52% after 4 consecutive days of gained. The marginally decreased in the DJIA was caused by analysts’ advised on selling bank share and the talks with IBM by Sun Microsystems fell apart.U.S. stocks should rally further this week, if investors get more signs that the economic slump is abating. We are optimistic that the DJIA will regain its 8000 important level and resume its uptrend. Technically, the DJIA will face with another staunch resistant level at 8220 level which is the day high set back in October last year. The DJIA is expected to consolidate upward in the near term. [Reminder: Japan will release its BoJ Target rate later of the day (Prior 0.1% Vs Survey 0.1%)]
Cash composite rally as Ringgit strengthen on 4-weeks rally and positive regional markets. The KLCI surged about 16 points to 923 mainly contributes by mining, finance, plantation and properties sectors which were the biggest gainers as well. Total 876M shares valued at RM1.273B changed hand yesterday, renewing hopes for the stocks market to revive.
Meanwhile April contract inches up about 16.5points to 926.50. Total volume increase from 7,234 to 11,360 while open interest expands from 19,137 to 19,551.The HSI edged up to a three-month high to 14,998 after it gained about 452 points, lifted by hopes for economic stabilization in the United States and faster recovery in China but profit taking pressure following the previous session's rally slowed the main index's advance.
Recent market rallies due to better than expected positive news from US and regional market have bring some light to our composite index performance. Closely tracking the regional market performance the composite index might sustain above 900 marks longer than we expected. Gazing at the technical we expect the April to soften slightly due to overbought position on RSI and the index is hovering upper Bollinger band for a while now.

At current stage, we are optimistic on the KLCI, however, we viewed that the upside potential is limited at the moment. Rather than encourage investors to Long at the moment, we will advise investors to take scale up and short position if the market reach/ near to the 935 level. Immediate resistance can be seen at 935 level while support would be 892 level based on 10-days SMA.(Reminder: All the By-election will be held today and the result is expected to be known later tonight

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