Daily Commentaries 26th May 2008

Following the failure to crack above the 1300/05-resistance area last week, the KLCI has retraced and is in the midst of testing the 1-month low of 1271.42. A breach of which could see the index trying to fill the previous downside gap of 1267.65. In view with the completion of double-top pattern of the 13-day RSI, we reckon the aforementioned scenario is highly probable. As for notable corporate news today, it was reported that Kencana could be getting a RM500m fabrication contract and IJM clinched a RM490m rail deal. We would expect the KLCI to extend its sideways momentum.