FBMKLCI
Breaking 1400 or the end of the Technical Rebound?
The FBMKLCI staged a strong rebound, breaking through the Fibonacci level of 23.6% and closing the gap formed on 23rd September 2011 (please refer to the chart below). So, after the gap being closed, will the index heading towards 1400 level or this will be the end of the technical rebound?
I will not guess on the development until the situation being confirmed today. Currently, yet to have any signal that this is the end of the technical rebound thus the index may resume its upward trading until 1400 level.
Investors should take extra cautious on the budget announcement today, not expecting surprises from the budget, however, will this encourage the start of the sell-off after the budget announcement? Will Monday be the starting of the sell-off after the quarter end? I shall cover in detail in my next week’s report. Besides, we shall have a look at the development in Dow on Monday as well.
CIMB
Last Done Price: RM6.88
A lot of investors are asking whether can accumulate this stock for trading? Let us have a look at this stock from technical perspective as we know that there is no problem from fundamental perspective.
For me, I will not initiate a buy position at current level as my rule of thumb - the stock price must at least leap above the Bollinger middle band. Thus, if investors will like to initiate a position, the stock will need to trade above the RM7 convincingly with stop loss level being set around RM6.50 level, else, recent rebound can only be viewed as a technical rebound and it is not suitable to pick up the stock at this level.
I shall cover this stock in detail when there is a clear turning signal for us to initiate a buy position.
FKLI
Take the Opportunity to Dispose your Long Position…
Those who initiated long position, as per mentioned, please try to dispose it or at least reduce your position ahead of the budget announcement. We will not know what will happen to the market after the budget announcement, thus, investors should reduce your risk by holding less position. For risk averse investors, take a good rest ahead of the weekend as this is not a suitable situation to take risk.
Immediate resistance is seen at 1400 level, followed by 1410 level and the immediate support is seen at 1380 level, followed by 1370 level.
FCPO
Time to Initiate Short Position?
The answer for the above - I would say “yes” for risk taker investors. As covered in my yesterday’s report, if the FCPO unable to hold convincingly above the 2900 – 2918 levels, investors can initiate short position with the stop loss level being set around 2950 level. The widening in the Bollinger upper and lower band coupled with the FCPO is trading below the Bollinger middle band is creating more weakness moving forward. The current trend is a downtrend after recent consolidation, albeit in a slower pace.
Immediate support is seen at 2850 level, followed by 2800 level and the immediate resistance is seen at 2910 level.
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