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Tuesday, July 23, 2013

FKLI 23/07/2013 >>> Previews and Technical Outlook

Expect futures to trend higher for the day, tracking gains in major bourses around the globe. In the US, the S&P 500 staged a third consecutive day of record high closing while dismal earnings from
McDonalds curbed gains in the Dow. Nevertheless, solid performance in the financial and health sectors managed to sustain gains. Back home, the FBM KLCI ended unchanged at 1797.68.

The local index ended flat after trading higher for most part of the day on last minute foreign selling activities. Meanwhile, volume across the board was thin as investors await the release of corporate earnings for the second-quarter prior to making investment decisions. The market was weighed down by British American Tobacco, Hong Leong Bank, and Kuala Lumpur Kepong Bhd. On the other hand, telecommunication stocks provided support for the market as Digi released favorable corporate earnings. Futures were still being traded at a premium of circa 4 points from its underlying cash market.
Futures prices drifted 0.17 percent higher to settle at 1801.50. Trading activities was depicted through the formation of an inverted white hammer, which is considered a bearish signal during an uptrend. Moreover, 20 day moving average now lies above the 50 day moving average and prices stray further away from its 20, 50, and 100 day moving averages, which suggest a bullish trend. As such, support and resistance can be eyed at 1790 and 1810 respectively.

Technical indicators
MACD= Positive, ADX= Positive
Intraday technical support & resistance for 23rd July 2013
1st support 1,790; 2nd support 1,785-80
1st resistance 1,806.5, 2nd resistance 1,810-15

Trade may long with a stop on or below 1790.

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