ZLBT Chats

Tuesday, December 6, 2011

Market Round-up, FBMKLCI, DRB HICOM, PROTON 05 Dec 2011

Market Round-up 05 Dec 2011
The local stock market stayed buoyant on Monday with profit-taking well absorbed on improving external sentiment and resurgent buying momentum, as speculation of a change in shareholdings in Proton kick started rotational plays on lower liners. The KLCI stayed range bound between low of 1,487.36 and high of 1,492.71 before closing up 0.93 points at 1,489.95, as gainers led losers 407 to 337 on robust volume totaling 2.3bn shares worth RM1.33bn.

The strong comeback in trading momentum is positive and must sustain to promote further upside for lower liners, while blue chips congest to rebuild support. The immediate resistance stays at 1,503, the 200-day moving average matching last Thursday's high, a key hurdle to cross and promote breakout to target 1,529, the 76.4% Fibonacci Retracement (FR) of the 1,597 to 1,310 sell-off. The next significant hurdle will be 1,597. Immediate support is at 1,472, the 100-day moving average, with better support at 1,438, the leveling 50-day moving average.

FBM KLCI Technical Outlook 
On Monday, the KLCI was still trading in a narrow range, gaining only 0.93 points at the close. As indicated by A, the KLCI is still below the 1500 level, which is also the level of the 200 day Moving Average line. Therefore, the 1500 is likely to be a strong resistance for the KLCI, while the support is at 1430.

As indicated by B, total market volume increased 36.32%, with volume high above the 40-day volume moving average. However, most of the actively trading counters were lower liners, and their call-warrants, which were trading below 50 cents. Therefore, the high volume on Monday has failed to truly reflect the investors' confidence about the local market.

As indicated by C, since breaking above 70%, the Stochastic has been staying above 70%, in the short term bullish territory. This suggests that the short term movement of the KLCI is still positive.

In conclusion, the technical outlook for the KLCI remains positive but since the KLCI is still below 1500, the KLCI has not yet resuming its uptrend movement, but rather, continue in its trading range or consolidating stage.

Technical Chart DRB Hicom ( Code : 1619), DAILY 
DRB-Hicom brokeout on strong volume yesterday, enhancing upside to climb above the upper Bollinger band and re-test the 7/4/11 peak of RM2.50 for breakout towards RM2.81 (1.236FP), RM3.00 (1.382FP) and RM3.16 (1.5FP) in the longer-term. Good support is seen at RM2.00 (61.8%FR). 

Technical Chart : PROTON (Code : 5304) WEEKLY
Proton extended strong breakout rally for a second day, hence a pullback is likely near-term which should be good buying opportunity for further medium-term upside towards RM4.80 (50%FR), RM5.58 (61.8%FR) and RM6.54 (76.4%FR). Immediate support on a profit-taking pullback is at RM4.02 (38.2%FR).


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