ZLBT Chats

Wednesday, January 11, 2012

FKLI sentiment positive, prices to challenge resistance 11 Jan 2012

Expect futures to trade higher today as US stocks reached a 5-month high as investors took as bullish stance towards material stocks. Sentiment improved for those watching the debt crisis in Europe after influential ratings agency Fitch dismissed cutting France’s rating this year. However, key auctions of Italian and Spanish bonds later this week will give a much clearer indication of the state of Europe’s finances. 

Back home, FBMKLCI settled marginally higher at 1521.99, up 0.26 percent. The index traded within a tight range of circa 5 points in an uninspiring trading session. A lack of any significant leads and global economic uncertainties resulted in light trading as investors stayed sidelined. Market sentiment remained in positive territory as futures extended its premium over the underlying cash market to 5 points.

Overnight Leads
U.S. stocks climbed to a five-month high on Tuesday, led by materials stocks after an upbeat forecast by aluminum company Alcoa and strong gains in bank shares.

Futures settled at 1527, up 0.16 percent after recording its 4th consecutive white candle to continue its bullish trend. The day’s trading was uneventful as futures traded within a tight range. MACD continues to diverge against its 9-day moving average. Look for futures to test the 1532 level, a sustained break above this level will lead futures to advance towards 1550 and fill the gapdown made in the first week of August last year. As such, support and resistance levels pegged at 1527 and 1550 respectively.

Aggressive trade may long with stop on below 1527.


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