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Wednesday, January 18, 2012

FKLI Daily Previews 18 Jan 2012

Expect futures to trade range bound today as US stocks on the whole recorded slight gains. The Street was buoyed on by better than expected GDP figures released from China despite growth slowing on a year-on year basis. 

However, no follow through buying was witnessed, as banking behemoth Citigroup contributed to limiting the gains as it lost 8 percent after reporting disappointing earnings. 

On the home front, FBMKLCI finished the day at 1519.36, up 0.68 percent. The index traded in a subdued fashion for the first half of the day as investors stayed cautious. Nevertheless, during the afternoon session, the index proceeded to trade higher following regional markets after a slew of encouraging economic data out of China lifted world markets. Market sentiment remained positive as futures trades at a 2.5 points premium to the underlying cash.

Overnight Leads
U.S. stocks advanced on Tuesday, pushing the S&P 500 to its highest since early August, but sharply pared gains late in the session as Citigroup's steep drop in profit gave investors a reason to unload bank shares.

Futures settled at 1522.0, up 0.79 percent. Four consecutive days of black candles was snapped by the formation of a long white candle. The bulls controlled the market booking most of their gains in the afternoon session. Investors continued to stay sidelined evident by the light trading. MACD remains on a bearish divergence path and futures 3-week trading range still intact. As such, support and resistance levels pegged at 1510 and 1532 respectively.

Aggressive trade may long with stop on below 1510.


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