Unlike the last two sessions, the FBM KLCI eventually failed to hold on to part of the last week’s gains and ended the day with a los off about 9 pts. Nevertheless, yesterday’s retracement was not excessive considering that the index had put on some 45 pts on the first week of 2011.
As we mentioned last week, we have drawn the new resistance line which is projected from the uptrend line. As a result, we have a new uptrend channel on the daily chart. In fact, we will view the market action within the uptrend channel as insignificant as we will continue to expect the FBM KLCI to trend higher as long as it maintains a posture within the channel.
At this stage, the resistance line is still very much at the assumption stage, being simply a projection from uptrend line 1. This is because we would need at least three connecting points to draw a trend line but the September peak is the only point we have now.
From the current level, last Friday’s intra-day high of 1,572 pts is still the immediate resistance. To the downside, immediate support lies at the 1,551 pt-level, followed by the 1,532 pt-level.
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