Given the more bearish trend indicators on the FBM KLCI, the medium to longer term outlook has turned decisively more bearish. Nonetheless, expect stocks to stage a rebound this week, due to the still oversold technical momentum which should attract buyers into the local market to bargain oversold stocks.
Stocks with their 14-day RSI readings below 30 would be very attractive to bargain for technical rebound gains. Blue chips wise, look for bargain-hunting opportunities in AirAsia, CIMB, Genting Bhd, Public Bank, Tenaga Nasional, MAS, Petronas Chemicals and Bursa Malaysia on weakness for medium-term upside.
Index-wise, the sighting of an extremely long daily "hammer" candlestick last Tuesday, a potentially bullish reversal Japanese candlestick pattern, augur well for bulls this week. Thus, investors can expect further upside as technical momentum remains oversold. Additionally, with the external market environment improving after a few major European countries banned short-sales on their listed banks amid improving US economic data, the Asian region and locally should see follow-through gains this week.
Immediate support for the FBM KLCI is now adjusted to 1,464, the 23.6 per cent Fibonacci Retracement (FR) of the sell-off from the 1,597.08 record high of July 11 to the recent extreme low of 1,423.47 on August 9, with next stronger support at 1,450. Immediate resistance would be at 1,510, the 50 per cent FR, with next upside hurdle at 1,530, the 61.8 per cent FR which mirrors the 200-day moving average. This previously crucial support will become a major resistance capping upside in the immediate term.
Stocks with their 14-day RSI readings below 30 would be very attractive to bargain for technical rebound gains. Blue chips wise, look for bargain-hunting opportunities in AirAsia, CIMB, Genting Bhd, Public Bank, Tenaga Nasional, MAS, Petronas Chemicals and Bursa Malaysia on weakness for medium-term upside.
Index-wise, the sighting of an extremely long daily "hammer" candlestick last Tuesday, a potentially bullish reversal Japanese candlestick pattern, augur well for bulls this week. Thus, investors can expect further upside as technical momentum remains oversold. Additionally, with the external market environment improving after a few major European countries banned short-sales on their listed banks amid improving US economic data, the Asian region and locally should see follow-through gains this week.
Immediate support for the FBM KLCI is now adjusted to 1,464, the 23.6 per cent Fibonacci Retracement (FR) of the sell-off from the 1,597.08 record high of July 11 to the recent extreme low of 1,423.47 on August 9, with next stronger support at 1,450. Immediate resistance would be at 1,510, the 50 per cent FR, with next upside hurdle at 1,530, the 61.8 per cent FR which mirrors the 200-day moving average. This previously crucial support will become a major resistance capping upside in the immediate term.
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