Technical View

The FBM KLCI continued to consolidate healthily following a gain of some 45 pts in the first week of the year. Although the market shed 4.45 pts yesterday, the market action was still confined within the recent consolidation range. Thus far, the market has been able to retain most of the 45 pts of gains. The FBM KLCI has not only been trending sideways in a constructive manner for more than a week, but what is more important is that the index has remained within the uptrend channel. This is because we view market action within the uptrend channel as insignificant as we will continue to expect the FBM KLCI to trend higher as long as it maintains a posture within the channel. Meanwhile, the index’s current constructive posture is a signal that there is a great possibility that it would be able to create a new record high soon. From the current level, the 1,572 pt-level is the immediate resistance. To the downside, immediate support still lies at the 1,551 pt-level,  followed by the 1,532 pt-level.