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Friday, April 17, 2009

FKLI Market Outlook 17 April 2009

Standing strongly above the 8000 level, approaching the 8270 level!
Overnight DJIA secured 95 points, +1.2% to close at 8125 level led by Technology and bank shares. JPMorgan leading the surged in bank shares as the company posted a better-than-expected earnings and stated that they are ready to pay back government’s bailout fund.
Technically, the DJIA is heading to a better technical landscape as it finished above 8100 level. However, the next tough resistance level is situated at 8270 level (the level reached on February 10th). However, the narrowing in the Bollinger upper and lower band at this uptrend movement is attracting our concern towards the sustainability of the uptrend.
Currently, the DJIA need to garner more power to surpass the 8270 level to resume its upward movement. We maintain our positive bias with cautious on DJIA.
Sentiments weaken in line with retreat in regional markets on profit taking set in after a five days winning streak. STI dipped 14 pts or -0.74%, Nikkei up 12.3 pts or +0.14%, HSI shed 86 pts or -0.55% while KLCI gained marginally 4.6 pts higher or +0.48% led by financial stock.

Turnover stood at 1.96B worth 1.46B. Meanwhile, investors were locking in profit in second session causing the FKLI to close 6.5 pts lower at 952. Basis stood at 9 pts discount from 2 pts premium against cash. Turnover increased to 11,461 lots from 11,219 lots while open interest fell to18,238 contracts from 18,439 contracts.
For today, positive sentiment is yet to over as investors may buy on dip to push the index to higher level as overall technical landscape still indicating the positive move in FKLI is sustainable.

Underlying – KLCI is going to retest the MA 200 (964 level) today. If the KLCI manage to sustain above this level, as we mentioned previously, the uptrend is undeniable in the near term. Choppy trading is expected ahead of weekend and investors are advised to place tight stop lost to prevent excessive lost. Immediate support stood at 941 followed by 932 while resistance pegged at 971 level.

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