· Bulls regrouped and arrested the recent corrective pullback, bumping up the CI back above the short term moving averages namely the 30days and 50days. A lack of negative news, ample liquidity as well as the much anticipated Invest Malaysia had been underpinning the recent strength of the local market.
· For the near term ahead, we would expect the market to continue to range trade with a slight upward bias as the market reaches the half-way mark for the year. Window dressing activities as well as the anticipated announcement of further liberalization measures should continue to sustain the market in the near term. Immediate resistance can be expected at the 1,091 – 1,097 levels with 1,134 as next. Support can now be found at the 1,053 – 1,044 levels with 1,030 as next.
· While the market is retaining its positive bias in the near term, we continue to question the sustainability of the uptick from the March 09 low. We maintain our view that the risk / reward remains to favour the former as the market moves higher. Pockets of risks to the so called “green shoots” remain and that the global markets are in need of a consolidation before it can continue to move substantially higher from their current levels. We are therefore maintaining a trading sell call on the market as we enter into the seasonally weaker 3Q.
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