KLCI Daily Chart (Source: TradeSignum)Commentary
Refer to KLCI Daily Chart shown above, it has successfully builded a base at the low of 1474 level during the profit taking acitivity occured 2 weeks ago. It rebounded and moved all the way up to 1521 level last week, follow by another round of profit taking activity which has pulled the KLCI down to 1508 level. The market volume has soften from the peak of 1.5bil to around 1.0bil level with less excitement anticipated due to the year end holiday mood in Dec 2010.
Technical Indicators
- KLCI stays above 50MA & 200MA level: Bullish.
- MACD (12,26) golden-cross: Bullish.
- RSI stays at 50 level: Neutral.
Support level
1,500.
1,530.
Near Term Outlook (30-days)
KLCI less excited with less activity happening due to the holiday season in Dec 2010, most of the fund managers may decide to close the account book earlier thanks to the huge capital gain in year 2010 bull run. Bluechips may not fluctuate much from current level, but undervalue mid-cap to small-cap may outperform the index link counters in near term.
Long Term Outlook (6-months)
With the improvement of global economy sentiment especially in US & Europe, and huge potential growth in Asian region especially in emerging markets, overall sounds convincing and it is good opportunity for equity and commodities markets in year 2011 ahead. Technically, as long as the KLCI stays above the long term bullish support line, the uptrend still intact and the super bull run in year 2011 is highly anticipated.
Trading opportunity
Bargain hunting on good fundamental stocks on weakness.
Favourite stocks recommendations
Finance - Maybank, CIMB, RHBCAP, PBB.
Consumer - Asia File, CI Holdings, GuanChg, TWS.
Construction - Kimlun, Sunway, Gamuda, Wct.
Healthcare - KPJ, Faber.
Plantation - BStead, TDM, MHC, Cepat.
Trading/services - Kfima.
Gaming - Genting.
Telecommunication: Axiata.
Environmental: Cypark.
Oil & Gas: Kencana, Pchem.
Industrial: DRBhicom, Daibochi.
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