KUALA LUMPUR: OSK Research says the FBM KLCI has violated the short-term line which was constructed very recently.

In its technical outlook on Thursday, Feb 18 it said the breakout from the downtrend line was incredible as it happened very soon after the FBM KLCI experienced two major technical breakdowns from the 50-day MAV line and the 100-day MAV line recently.

OSK Research said the breakdown from the 50-day MAV line was the most critical technical breakdown by the key index since the massive rally started in March last year. Moreover, the breakdown from the 100-day MAV line was supposedly a major trend changing signal.

However, it said that after two days of national holidays, the market re-opened yesterday with an incredible breakout from the downtrend line.

Yesterday, the key index even surpassed the 100-day MAV line but still finished the day below this line.

"We think it is too early to change our view towards the nearer-term outlook despite the key index
having taken out the short-term downtrend. We are still worried that the breakdown from the
longer term trend lines, namely the 50-day MAV line and the 100-day MAV line, signal a major
shift in trend. Meanwhile, we maintain our bearish view towards the near-term outlook.

OSK Research said the immediate resistance is still seen at the 100-day MAV line, which now lies at the 1,260-level, followed by the 50-day MAV line, which is currently trading at the 1,275-level. To the downside an immediate support lies at the recent-low of 1,224.