OSK Research: Selling pressure on FBM KLCI stocks subsides

KUALA LUMPUR: OSK Research says selling pressure on the FBM KLCI linked stocks has already subsided over the last three trading days.

In its technical outlook issued on Friday, March 19 it said this was mainly because of the strong support provided by the base level of the 13 points upside gap

“As there were two rounds of big gap ups experienced by the market over the last two weeks, the retracement since hitting a peak of 1,334 pts has not concerned us at all thus far. The pullback will only start to concern us if even the second upside gap as highlighted in the above daily chart is violated,” it said.

OSK Research said the market could have easily entered into a temporary overbought zone after it had experienced two days of sharp gap up at the opening earlier this month. However, the overbought condition has already been fully corrected as the daily RSI closed at the 56.6 pt-level yesterday.

“Meanwhile, we are maintaining our bullish view towards the near-term market. The market had just written off two major bearish reversal possibilities and the trend now is up,” it said.

While a “Bearish Harami” bearish reversal signal has been detected, it will not be bothering us until the second upside gap is also taken out.

From the current level, continue to look for the 1,319-1,321 pts area as the immediate resistance followed by last Thursday’s high of 1,334 pt-level as the second resistance. Immediate support is seen at the upside gap ranging from the 1,299 pt-level to the 1,312 pt-level. The next support is detected at another upside gap ranging from the 1,284 pt-level to the 1,295 pt-level.