The FBM KLCI continued to retrace by another 6.13 pts yesterday. The market has lost some 30 pts since hitting a high of 1231.49 pts. Nevertheless, the retracement is not worrying us just yet as we know that the 50-day MAV line is giving a clear signal that the market is still on an uptrend. Note that India’s key benchmark index cracked a new high yesterday while Jakarta’s benchmark index is approaching the recent-high. Once again, there was no panic selling across the board.
Although the FBM KLCI could have gone up at a faster pace after violating the 1196.46 pt-peak, the recent retracement does not bother us. Our view towards the near-term market will remain firmly bullish as long as the 50-day MAV line is not violated.
From the current level, an immediate support lies at the 1,196.5-1,200 pt-area and a very strong support is seen at the 50-day MAV line, which is now situated at the 1,178 pt-level. To the upside, an immediate resistance lies at the 1231.50 pt-level followed by the 1242 pt-level.
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