KL Composite Index - Positive bias still
· Market continues to surprise on the upside. Our envisaged resistance at the 1,053 level proved too feeble as buying momentum picked up, disappointing the bear camps. A benign external environment, ample liquidity couple with expectations of more goodies to be announced towards the end of the month in conjunction with Invest Malaysia have continued to incentivize the buyers and contained the sellers. Technically, the bullishness of the market remained intact, augmented with the break above the uptrend resistance line at the 1,053 level. Weekly RSI continues to head north, indicating strength. While maintaining a positive bias in the near term, the daily RSI however continues to exhibit a negative divergence which we will monitor closely. Next possible resistance is now pegged at the 1,097 – 1,100 level on the weekly with 1,054 as support. Our strategy of top slicing at the 1,070 – 1,100 level is maintained based on risk / reward.
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