5th October 2011, Wednesday

Hi, Dear Fellow Colleagues,

I am so sorry, I really thought that last Friday was 7^th of October cause our arrangement of events are all in October. However, no worries, I will change my view in accordance… Thanks for reminding me…

FBMKLCI

Budget Rally?

Yesterday, the FBMKLCI went into positive territory when regional markets are suffering around 1% of dropped in second session. Besides, most of the bourses suffered more than 3% of losses at close but we managed to close marginally lower only, is this indicating the start of the budget rally? The answer is “maybe”! However, we just follow the market direction and trade accordingly.

Two days ahead of the budget, what should investors do? Investors should remain taking profit on any rebound prior to the budget announcement. The immediate resistance is seen at 1377 level (Fibonacci level of 23.6%), followed by 1400 level. The immediate support remains at 1350 level. This level should able to be supported at least for the week.

FKLI

Drastic Changes of Strategy?

For risk taker investors, you can choose not to close your short position ahead of the budget announcement as today already is Wednesday. Your stop loss can still be placed around the 1405 level. However, risk taker investors can ride on the budget rally by initiating short term buy position on any level below 1370 with stop loss level being placed around 1353 level.

For risk averse investors, you should stay on bay or you can choose to initiate small long position to ride on the pre-budget rally. Any level below 1370 level should serve as a good level to initiate your long position with the stop loss being placed around 1365 level. Please bear in mind that this long position must be closed before the end of tomorrow.

Immediate resistance is seen at 1380 level, followed by 1390 level and the immediate support is seen at 1366 level, followed by 1353 level.

FCPO

More Downside Ahead…

Overall technical landscape never changes since last Friday’s call. The FCPO has confirmed that it will trade within the next wider trading range of 2670 – 2919 levels.

For more detail, please refer to yesterday’s FCPO market outlook (below) and Monday’s weekly market outlook (if you need to refer, please click here for Monday's report)