Last week, we designated the 1040 level as a very crucial technical level for the KLCI. So far the KLCI has failed to break through this level and came the closest with a high of 1037 last Thursday. The KLCI bull will make another run at this level this week, will it fail again?
KLCI: Likely to make another attempt at 1040
Last Friday, the KLCI challenged the 1040 resistance level unsuccessfully, despite a highvolume session last Friday (3.2bn shares traded), likely due to profit-taking activities. However, we remain positive on the KLCI given that the 30-day MAV line has intersected the 200-day MAV line. There are also some feel-good factors on the economic front: (1) Malaysia’s Mar09 exports rose 10.3% mom. (2) The government has awarded and implemented RM5.6bn worth of projects under the two stimulus packages (source: Bernama). These feel good factors will give the KLCI another chance at the 1040 level this week.
Last Friday, the KLCI challenged the 1040 resistance level unsuccessfully, despite a highvolume session last Friday (3.2bn shares traded), likely due to profit-taking activities. However, we remain positive on the KLCI given that the 30-day MAV line has intersected the 200-day MAV line. There are also some feel-good factors on the economic front: (1) Malaysia’s Mar09 exports rose 10.3% mom. (2) The government has awarded and implemented RM5.6bn worth of projects under the two stimulus packages (source: Bernama). These feel good factors will give the KLCI another chance at the 1040 level this week.
Dow: Base building at 8400
After its strong rally in Feb-Apr, the Dow has been consolidating last week. Base-building can be seen at the 8400pts level. We believe this 8400 base is further supported by encouraging economic data such as Apr09 job losses which were lower than expected.
After its strong rally in Feb-Apr, the Dow has been consolidating last week. Base-building can be seen at the 8400pts level. We believe this 8400 base is further supported by encouraging economic data such as Apr09 job losses which were lower than expected.
Strategy: Maintain positive outlook
We remain positive on the Dow and the KLCI. On a minor cautionary note, we believe the repeated failure of the KLCI to break 1040 could be a potential sign of exhaustion for traders.
We remain positive on the Dow and the KLCI. On a minor cautionary note, we believe the repeated failure of the KLCI to break 1040 could be a potential sign of exhaustion for traders.
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