FBMKLCI TO TEST 100% FIBO R SUPPORT - AGAIN
Immediate resistance for the FBM KLCI on an assumed technical rebound this week would be at 1,464, representing the 23.6% Fibonacci Retracement (FR) of the sell-off from the 1,597.08 record high of 11 July to the recent extreme low of 1,423.47 on 9 August, with next upside hurdles at 1,490 and 1,510, the respective 38.2%FR and 50%FR levels.
A more formidable hurdle would be the 200-day moving average, currently at 1,526. On the flipside, the index must hold above the crucial pivot low support at 1,423.47, reinforced by 1,420, the 50%FR of up-trend from the 1,243 low of 27/5/10 to the 1,597.08 record high, to prevent deeper correction to 1,378, the 61.8%FR, with next significant retracement support at 1,327, representing the 76.4%FR.
The blue-chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI)
slumped 38.19 points, or 2.6% last week to settle at 1,430.93, with Sime Darby (-79sen), Tenaga (-28sen), CIMB (-18sen) and IOI Corp (-16sen) contributing to slightly more than half of the index’s loss. Average daily traded volume and value recovered mildly to 720.8mn shares and RM1.22bn respectively, compared with the 710mn shares and RM1.25bn average the previous week.
An oversold rebound imminent
Spot month September KLCI futures contract traded on Bursa Malaysia Derivatives Berhad slid 31.5 points, or 2.16% for the week to 1,427.5, decreasing its discount to the cash index to 3.43 points, compared with the 10.1-point discount the previous Friday. Short-covering increased to lift the futures market as the index drew closer to the pivot low of 1,423.