Look for buying opportunities on dips oil & gas-related stocks such as SapuraCrest, Scomi Group, Dialog, Kencana and SAAG, says a research headDespite short-term overbought momentum for the FBM KLCI signaling profit-taking correction will be forthcoming, the more bullish readings on trend indicators suggest that any profit-taking dips should be shallow as market undertone has turned positive. Also note that the FBM KLCI has staged a decisive bullish breakout for a close above the 200-week SMA which is at 1,098, signaling further significant upside potential in the medium term.
Nonetheless, continue to recommend investors take profits or reduce holdings of blue chips such as AMMB, Axiata, Gamuda and Public Bank as their overbought technical conditions begs for profit-taking correction. Conversely, look for buying opportunities on dips oil & gas-related stocks such as SapuraCrest, Scomi Group, Dialog, Kencana and SAAG for significant medium-term upside.
As for upside potential, strong buying momentum in the region of 1.5 billion to 2 billion shares is critical to sustain upward momentum towards the next two pivotal resistance of 1,153 and 1,165, the respective July 18 and July 31 pivot high last year. Note the second upside target mirrors the 50 per cent Fibonacci Retracement (FR) of the sell-off from record high of 1,525 to 801 pivot low at 1,163 that suggests this level could be a formidable ceiling. As for the downside, look for immediate support from the bullish breakout point of 1,095, with stronger cushion anticipated at 1,083.
The subject expressed above is based purely on technical analysis and opinions of the writer. It is not a solicitation to buy or sell.
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