FKLI Trading 12th October 2009

Steady buying support on blue-chip counters kept KL index futures afloat buoyed by mounting optimism about the global economic recovery. Earlier last Friday, futures prices propelled to a fresh high for the year at 1239.5 before retracing mildly to settle at 1238, up 4 points on the day. For the past week, KL markets came back to life on renewed optimism buying in step with Wall Street advance after Alcoa, a heavyweight component stock of DJIA, released betterthan expecting earnings. On daily basis, KL index futures extended its upward thrust for 5 consecutive days Chart wise, the current trend appears bullish but turnover has been relatively thin, implying many traders are sitting on the sidelines possibly on worries that the market has gotten too far ahead of the recovery. For the coming week, anticipated earnings optimism by JPMorgan, Goldman Sach, Intel, IBM and Bank of America, and a slew of economic data slated for release this week could well assess the pace and magnitude of economic recovery. With Wall Street having hit a closing high for 2009 last Friday, this should pave the way for more upward scaling towards 1247 level. Downside support is now raised to 1235.