KUALA LUMPUR: OSK Research said the  immediate technical outlook of the FBM KLCI is bullish after the FBM KLCI had on Monday, July 26 created a new high in the 2009-2010 rally. However, CIMB Retail Research was more cautious about the sustainability.

OSK Research said in its technical outlook on Tuesday there had previously been three failed breakout attempts at the 1,350 pt-level during the March-May period.

Although the index only violated the 1,350 pt-level marginally, it could turn out to be a major market action which could lead to further upside for the market. “The immediate technical outlook of the FBM KLCI is bullish,” it said.

OSK Research said the rebound starting from the May low was actually not a bear rebound as we had expected. This is the second time since March 2009 that a major breakdown experienced by the FBM KLCI did not lead to the kind of sharp decline normally seen.

To re-cap, the first violation of the critical 50-day MAV line in February this year also did not cause the FBM KLCI to retrace drastically from the moving average line. “From the current level, look for the next tough resistance at the 1,395 pt-level. Initial support is now seen at the 1,350 pt-level, followed by the 1,332 pt-level and the 1,326 pt-level,” it said.

However, CIMB Retail Research was more cautious about the outlook, despite that the FBMKLCI gapped up at the opening bell and stayed positive throughout the day.

“Looking at the chart, it seems that the benchmark is pushing for one more upleg to test the short term resistance line at 1,355 (which could be tested as early as today) and possibly even 1,370 next, “ it said.

CIMB Research said however, the main concern here was its sustainability.

“We believe correction will take place after this uptrend is exhausted. To be on the safe side, keep on eye on 1,328, as a breach below this level could be seen as a precursor to the next downtrend,” it said.