Conclusion
As correctly anticipated in the previous week's outlook, the local market saw a significant technical rebound which has adequately corrected extremely oversold technical conditions on the index and most index-linked stocks. While most momentum indicators have turned bullish to signal further near-term upside bias, trend indicators suggest that the market is still wobbly and prone to further correction ahead. Last week's rebound can be viewed as a bear-market rally. Thus, this week would be a good selling-on-strength or profit-taking opportunity, especially ahead of Budget Day on Friday as the market would be rife with speculation of what goodies are in store. A "buy the rumour and sell" on fact mentality should prevail this week.
As for the FBM KLCI, immediate resistance remains at 1,400, with next hurdle at 1,420, the 38.2 per cent Fibonacci Retracement (FR) of the sell-off from the 1,597 record high of July 11 to the recent pivot low of 1,310 on September 26. A decisive breakout above this level would see 1,454, the 50 per cent FR, being challenged going forward. On the flipside, immediate support is at 1,357, last Thursday's low, followed by last Tuesday's low of 1,339, and finally the 1,310 pivot low will be the critical support preventing further downside risk towards 1,293, the important 38.2 per cent FR of the upswing from 801 low in October 2008 to the 1,597 all-time high posted in July this year.
Read more: Shaky, pullback not ruled out for Bursa http://www.btimes.com.my/Current_News/BTIMES/articles/marketoutlookoct3/Article/index_html#ixzz1Zg9wX7v4
As correctly anticipated in the previous week's outlook, the local market saw a significant technical rebound which has adequately corrected extremely oversold technical conditions on the index and most index-linked stocks. While most momentum indicators have turned bullish to signal further near-term upside bias, trend indicators suggest that the market is still wobbly and prone to further correction ahead. Last week's rebound can be viewed as a bear-market rally. Thus, this week would be a good selling-on-strength or profit-taking opportunity, especially ahead of Budget Day on Friday as the market would be rife with speculation of what goodies are in store. A "buy the rumour and sell" on fact mentality should prevail this week.
As for the FBM KLCI, immediate resistance remains at 1,400, with next hurdle at 1,420, the 38.2 per cent Fibonacci Retracement (FR) of the sell-off from the 1,597 record high of July 11 to the recent pivot low of 1,310 on September 26. A decisive breakout above this level would see 1,454, the 50 per cent FR, being challenged going forward. On the flipside, immediate support is at 1,357, last Thursday's low, followed by last Tuesday's low of 1,339, and finally the 1,310 pivot low will be the critical support preventing further downside risk towards 1,293, the important 38.2 per cent FR of the upswing from 801 low in October 2008 to the 1,597 all-time high posted in July this year.
Read more: Shaky, pullback not ruled out for Bursa http://www.btimes.com.my/Current_News/BTIMES/articles/marketoutlookoct3/Article/index_html#ixzz1Zg9wX7v4
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