Market Outlook as at December 29, 2009

FBM-KLCI, which closed at 1272.73 yesterday, has broken above its short-term downtrend line at 1268. This bullish breakout needs to be confirmed by more convincing gains in prices (or, index) & significant rise in volume over the next few days. If these conditions are fulfilled, then my bearish scenario of our market entering into a sharp correction would be deferred. Instead, our market could see a good rally to test the recent high of 1288 recorded on Nov 17. It may even challenge the strong horizontal resistance at 1300. For more, see the daily & intra-day charts below.


Chart 1: FBM-KLCI's daily chart as at Dec 28, 2009 (Source: Tradesignum)


Chart 2: FBM-KLCI's 60-min chart as at Dec 28, 2009 (Source: Quickcharts)