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Tuesday, December 8, 2009

A lethargic market


Shares on Bursa Malaysia started the new week on a lethargic mode, and the overall market was very quiet without any fresh leads. The FBM KLCI was not updating in the morning session due to some technical issue, and that added to the quietness of the market. The afternoon session saw some liquidation on some index link counters, probably due to players locking in profit gained for the year so far, and that sent the benchmark index to drop 4.84 points or 0.38% to close at the lowest point of the day at 1265.36. Decliners led gainers by 309 to 295, while 256 counters were unchanged. Volume traded was low at 669 million shares worth RM848 million.

Chart wise, the FBM KLCI is again closed below the short term 10-days moving average (MA), and rested right on the 30-days MA, indicating short term correction. MACD, RSI and Stochastic continued to slide down, indicating possible further weakness ahead, supporting the short term correction and consolidation view. As the overall volume is low, this could well be a temporary correction. Nonetheless, the key index is in a critical support level, as a break below the 30-days MA may trigger further sell down to the 1250 level. The underlying uptrend as indicated by the longer term moving averages is, however, still intact.

Today, the FBM KLCI is expected to trade within a range of 1258 to 1273

This week's expected range: 1230 – 1288
Today's expected range: 1258 – 1273

Resistance: 1268, 1270, 1273
Support: 1258, 1261, 1263

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