ZLBT Chats

Thursday, April 9, 2009

FKLI Market Outlook 09 April 2009

Marginal surged in overnight DJIA (+47 points, +0.6%) helped by the possibility of government to give Troubled Asset Relief Program funds to insurers and Pulte Homes will buy Centex – create largest homebuilder.

The marginal increased in the US stock market is not helping much on the outlook of the technical landscape as the DJIA still facing with huge risk of resume its downward trading. Narrowing in the Bollinger upper and lower band coupled with the DJIA moved nearer to the middle band, raising the downside risk for the near term.
The support at the moment will be seen at the 7625 level and the resistance is seen at 8000 level, followed by 8160 level.

(Reminder: US will release its Initial Jobless Claim Data later tonight, the data is expected to be lower compare to previous)
Earning uncertainties dominate yesterday stock trading session as traders are still optimistic stock prices are yet to bottom out. As a result, KLCI fell about 12 points to 907.87 with 613M shares valued at RM 945M changed hand.

Meanwhile, April contract retreat to 913 after it dropped about 4.5points while May contract dropped about 5points to 908. Total volume was a little changed to 8,819 and open position was 20,835.

Regional market ended lower yesterday as Asian stocks fell for a 2nd day amid renewed worries over the U.S banking sector. As a result, the HSI tumble 454points to14,474, Shanghai composite fall about 3% to 2,347 followed by Nikkei, -237 to 8,595. Market doubts still arise even there is sign of regional and U.S markets recovery. However, most traders opt to use `wait and see’ approach due to world economy instabilities issues.
Yet again the market failed to sustain above 920 level today which might due to unimpressive by-election results recently. Therefore, the April contract is likely to hover between 904 - 915 based on lower and middle (MA) Bollinger band and the lack of fresh leads in the market. In addition, we expect the market to continue its consolidation above 900 level for this time being judging from neutral Relative Strength Index.

Our short-term view still remain that the FKLI will sustain and hover around the 900 level and if the FKLI failure to do so, the market will fall into a bearish mode. Immediate resistance will be 925 while support can be seen at 904 followed by 890.

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