Written by Joseph Chin
Tuesday, 21 July 2009 09:13
KUALA LUMPUR: Shares of Tenaga, Maybank and Public Bank advanced in early trade on July 21, sending the FBM KLCI to a fresh-year high, with sentiment remaining very firm following the strong overnight close on Wall Street.
At 9.03am, the FBM KLCI was up 4.92 points to 1,144.17. Turnover was 34.45 million shares valued at RM30.27 million.
Tenaga, Genting and Public Bank foreign rose 10 sen each to RM8.55, RM6.10 and RM10.30 respectively. Maybank added five sen to RM6.25.
Also up 10 sen each were Tanjong and Bursa to RM14.30 and RM7.40.
Among plantation-related stocks, Kulim was the top performer, chalking up gains of 15 sen each to RM7.20 while IOI Corp added six sen to RM4.86.
OSK Investment Research said the FBM KLCI has gone up by at least 10 points daily for five consecutive trading days. More notably, the key index has surged some 80 pts since the market bottomed out from the 50-day MAV line and it appears that the FBM KLCI is racing at a speed rather similar to that during the 2H06 rally.
In its technical outlook, it said the daily RSI is approaching the overbought territory of 80 points and the indicator closed yesterday right below it at 79.4 points. Before the potential lower-high emerged, we had mentioned that in every round of strong upsurge since April 2 that our market has the ability to stretch its gains close to the 90 point-level in a favourable environment - with a bit of luck.
“Market optimism is definitely at the highest point since the FBM KLCI cracked above the 100-day MAV line to trigger the current bull run and we will see if the bull will run wild in the coming days. Of course, rationally speaking, this week is supposed to be a test of conviction of the breakout from the 200-week MAV line as this line is a very tough resistance. There is still a great possibility that the market will take a breather this week,” it said.
OSK Research said a successful re-test of the 200-week MAV line would make us feel more comfortable on the breakout. The fact that the FMB KLCI successfully crack above the 1,084 pt-level to write off the possibility of a lower-high coupled with a breakout from the 200-week MAV line suggest that the market is establishing a new uptrend from the 50-day MAV line, and it was already seeing this unfold.
“We maintain our bullish view towards the near-term market. From the current level, an immediate resistance lies at the 1,165-level followed by the 1,187-level. To the downside, there is an immediate support at the 1,135-level, followed by the 1,120-level and the 1,108-level,” it said.