ZLBT Chats

Saturday, August 1, 2009

FBM KLCI Futures Close Mostly Higher >>> Upside Predicted Next Week

FBM KLCI Spot (July) Expired 1166.5
The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) futures on Bursa Malaysia Derivatives ended mostly higher today despite gains on the cash market, dealers said. Spot month July 2009 increased 3.5 points to 1,166.5, and August 2009 and September 2009 went up 0.5 point each to 1,164.5 and 1,162.5 respectively, while December 2009 was down 0.5 point at 1,155.5.
Total volume dropped to 10,795 lots from 12,011 lots yesterday while open interest declined to 26,775 contracts from 31,995 contracts previously.On the cash market, the underlying FBM KLCI rose by 14.2 points to 1,174.90.
FBM KLCI Futures Likely To Rise Further Next Week
The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) futures are expected to rise further next week in line with the cash market, dealers said.

On a Friday-to-Friday basis, the KLCI futures for July 2009 contract rose 9.5 points to 1,166.5 while August 2009 contract climbed 7.5 points to 1,164.5. For the other contracts months, September 2009 advanced 7.5 points to 1,162.5 and December 2009 went up 7.0 points to 1,155.5. A total of 65,897 lots were transacted this week, up from 40,017 lots last week.

Open interests increased to 26,775 contracts on Friday from 21,637 contracts previously. On the cash market, the underlying FBM KLCI ended the week higher by 19.02 points at 1,174.9 compared with 1,155.88 previously.
There will be roadblocks
Adding to the evidence supporting a possible FKLI pullback are medium-term indicators, like those noted in the FKLI daily & weekly charts, showing that the market is quite overbought, a condition that will need to be cleared.
In bull market conditions, which ZL would ascribe to our current situation, it is possible for overbought conditions to be worked off even as prices move higher. That is to say that prices may not pull back at all, but simply break up and out of the resistance levels. To the other extreme, a healthy price decline can also do the trick.
ZL is more optimistic with the 2nd option whereby 4 out of the Top 6 FBM namely Sime, Maybank, Commerz & PBB are much more overbought than the other 2 gigantos Tenaga & TM which are in fact lacking in tenacity than say, Genting, GenM or AMMB.
However, any FBM KLCI pullback at this level will not create much stress or anxiety since TM & Tenaga plus some of their peers in FBM 30 should be sufficient to counter balance any anticipated profit taking activities by Sime, Maybank, Commerz or even Public Bank Bhd.
True, the bulls may need a breather but rest assured the bears does not have the immediate strength to turn things around. Any bear infiltrators will be chased off by the bullish defenders. They have bigger guns ..... :D
FKLI Traders all onboard Express Bus to Bull City via Highway 1200!!!

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