An emotional reaction towards the DJIA’s 151-point drop caused the key indices in regional stock markets to retrace sharply yesterday. Likewise, the FBM KLCI also pulled back, by about 10 pts, closing 1-pt above the previous historic high recorded earlier this year.
Although the market’s retracement over the last two sessions had been rather aggressive, the most important factor is that this market action did not violate the short-term uptrend line. As such, our view towards the near-term market is very straightforward – we are basically maintaining our bullish view as long as the uptrend line is not violated.
There is now immediate support at the 1,577 pt-level, followed by the 1,565 pt-level. To the upside, initial resistance lies at the 1,588 pt-level while next resistance is at 1,597 pts.
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