Follow-through buying yesterday buoyed the market to a higher close for the second consecutive session. After the nearly 20-pt gain over the last two sessions, the FBM KLCI is now trading further away from the uptrend line. Another positive development is that the index ended above 1,510 pts for only the second time since 12 Nov 2010.
Although the index closed above the 1,510 pt-level yesterday, this breakout still needs to be confirmed, especially after it experienced a failed breakout attempt on 9 Dec 2010. Whether or not the market could continue to add more points from the current level would determine its immediate outlook. This is because another failed breakout attempt at the 1,510 pt-level would also see the index continue to trade within the recent trading band ranging from 1,474 pts to 1,510 pts.
We will maintain our firmly bullish bias view towards the near-term market until uptrend line 1 is decisively violated. The near-term technical landscape of the FBM KLCI improved with the nearly 20-pt gain but the violation of the 1,510 pt-level still needs to be confirmed.
The FBM KLCI’s historic high of 1,532 pts is now the only resistance which we can detect. To the downside, the 1,510 pt-level is the immediate support while another support is seen at the 1,485- 1,492-pt area.