High tone

25 November 2010

Snapshot – FBM KLCI

FBM KLCI plunged severely once market open on 24 November 2010 after the conflict in Korea Peninsula. However, the overnight news better-than-expected increase in US GDP has brightened up the market sentiment and thus, FBM KLCI regained its losses and closed 1.01 pts higher at 1,488.54.

People tend to be forgetful and thus, with the announcement of positive US economic data, people have set the uncertain issues aside such as the Ireland debt issue and the conflict in Korea Peninsula. Along the side of a series of corporate activities, plans and programs, many research houses have revised their target upwards, some even up to 1,900 pts.

Today, 25 November 2010, market proves again that the BULL is not over but sustainable. Intra-day chart shows that FBM KLCI remains upbeat, climbing on a strategic staircase towards the 1,500 psychological level again. The top gainers among the blue chips are GENTING, AXIATA and CIMB. The index was then bounded between 1,495 and 1,498, but biased towards the lower boundary. Overall, market breath was positive with 432 gainers and 328 losers. FBM KLCI closed 7.95 pts higher at 1,496.49.

Highlight – KNM Group Berhad

After being bashed down for sometimes due to the failure of privatization deal in April 2010, KNM has finally made a comeback. KNM opened with RM0.435 earlier, touched the high of RM0.50 and finally closed at RM0.495, representing a gain of 6 sen or 13.8%.

KNM has recently obtained RM680m Uzbeksitan job and its Q3 result had just announced on 24 November 2010 which has met the consensus expectation.

KNM called for stock split 1 for 4 in February 2010 and now they are calling for consolidation share to reverse the order.

Technical wise, improved MACD and flat prices hints for a positive divergence. Support lies at RM 0.40 whilst resistances locate at RM0.54 and RM0.70. Historical lowest point was at RM0.32.

With such configuration, I think upside momentum is overtaking the downside.

ALARM

• Petronas Chemicals Group Berhad will be listed on the main market tomorrow.
• Malaysia Consumer Price Index for October 2010 will be announced tomorrow.

Disclaimer: The company analysis that appear in this blog is merely facts gathered from different sources and the author's personal view. It is not a buy or sell recommendation. The author do not guarantee the accuracy of the facts being presented. Please consult your investment advisors before acting on any information provided by the analysis above.