Written by The Edge Financial Daily
Monday, 17 August 2009 09:00
KUALA LUMPUR: Kenanga Investment Bank said after the stellar run-up since March 2009, the local market is due for a breather.
In a technical outlook issued on Aug 17, it said while the run-up had been stronger and slightly more prolonged than what it had expected, technical indicators are however all flashing overbought leading to a more cautious stance on itspart in the near term.
"While the bullish momentum remained intact, some near term pullbacks and consolidation to digest the run-up since March cannot be discounted in the near term. As noted, RSI on both the daily and weekly basis are now trending at very rich levels with possibility of some downward adjustment not unexpected. The weekly meanwhile is also likely to face the neckline resistance at near the 1,191 – 1,189 levels which the bulls should not dismiss it lightly," it said.
Kenanga Research said while the bigger caps are likely to undergo some corrective pullbacks and consolidation, rotational interest into the mid and lower liners are likely to prevail given their laggard status and undemanding valuations.
For the near term, it expects immediate resistance at the 1,210 – 1,220 levels with support likely to be found at the 1,170 – 1,160 levels.
"A trading sell on the main composite index stocks are maintained with a rotation into the mid and lower liners for possible outperformance given relatively cheaper valuations and better risk / reward," it said.
Monday, 17 August 2009 09:00
KUALA LUMPUR: Kenanga Investment Bank said after the stellar run-up since March 2009, the local market is due for a breather.
In a technical outlook issued on Aug 17, it said while the run-up had been stronger and slightly more prolonged than what it had expected, technical indicators are however all flashing overbought leading to a more cautious stance on itspart in the near term.
"While the bullish momentum remained intact, some near term pullbacks and consolidation to digest the run-up since March cannot be discounted in the near term. As noted, RSI on both the daily and weekly basis are now trending at very rich levels with possibility of some downward adjustment not unexpected. The weekly meanwhile is also likely to face the neckline resistance at near the 1,191 – 1,189 levels which the bulls should not dismiss it lightly," it said.
Kenanga Research said while the bigger caps are likely to undergo some corrective pullbacks and consolidation, rotational interest into the mid and lower liners are likely to prevail given their laggard status and undemanding valuations.
For the near term, it expects immediate resistance at the 1,210 – 1,220 levels with support likely to be found at the 1,170 – 1,160 levels.
"A trading sell on the main composite index stocks are maintained with a rotation into the mid and lower liners for possible outperformance given relatively cheaper valuations and better risk / reward," it said.