The FBM KLCI is trying to break out from the recent trading zone ranging from 1,474 pts to 1,510 pts. Unfortunately, there was no follow-through interest in the market following last Thursday’s rally. Instead, the index ended the day back below the 1,510 pt-level. The market would need another strong push to the upside to confirm that the index is going to extend its uptrend further after violating the downtrend channel. If not, there is a possibility that the benchmark will be stuck between the 1,474-pt and 1,510-pt trading range.
Meanwhile, we maintain our near-term bullish view as the market is still trading at above the uptrend line 1. Needless to say, the longer-term outlook remains bullish as the index continues to extend its rising trend since March 2009.
Immediate resistance is still seen at the 1,510 pt-level. After the 1,510 pt-level, the historic high is the only resistance we can detect. To the downside, there is immediate support at the 1,500 pt-level, followed by the 1,485-1,492 pts area.