The FBM KLCI continued to retrace away from the recent-high of 1,349.92 pt-level yesterday. The
intra-day pullback was actually much worse but bargain hunting activities once again kicked in at
above the 1,320 pt-level. Remember the shock intra-day rebound that was experienced by the FBM
KLCI on 7 May 2010? That day, not even the DJIA’s 1,000 pts drop was powerful enough to pull the
market back below the two key lows in April. And yesterday, the key index yet again exhibited the
same type of desire to stay above the three key lows as is highlighted in the above daily chart.
Yesterday’s rebound off the intra-day low has left again a fourth short-term bullish reversal signal.
As the market continued to show strong desire to above the 1,320 pt-level and the key index
maintains its posture at above the previous three key lows, we maintain our bullish bias view
towards the market’s near-term technical outlook. The current weakness experienced by the
equity market will only start to worry us if the FBM KLCI dips below the previous three key lows.
Immediate resistance is now seen at the 1,340-1,347 pts area followed by the recent-high of
1,349.92 pts. To the downside, initial support is now seen at the yesterday’s intra-day low of 1326.96
pt-level followed by the 1,315 pt-level and the 1,300 pt-level.