Amazingly, the FBM KLCI bounced back into positive territory just before the market close yesterday to mark its eighth consecutive day of gains. Nevertheless, the broader market did not exhibit similar resilience. There were 585 decliners against 206 advancers.
Note that the market entered overbought territory two days ago. Although the index still exhibits no signs of reversal at the moment, note that that the market has never been able to stretch its gains in overbought territory since the bull market started in March 2009.
Meanwhile, the near-term technical outlook of the market remains bullish. To us, it seems that the 1,400 pt-psychological barrier has yet to be decisively taken out. Sustainability of the market at above the 1,400 pt-level is still a major doubt for us, especially since the breakout from the 1,400 ptlevel happened after seven consecutive days of gains. Moreover, the market is now trading in overbought territory. Anyhow, there is now immediate resistance at the 1,436 pt-level, followed by the 1,467 pt-level. To the downside, we are now eyeing the 1,400 pt-level as initial support, followed by the 1,395 pt-level.