For this week, investors should look for buying opportunities in oversold blue chips such as IOI Corp, Public Bank and Sime Darby, says a research head



While the weekly technical momentum indicators for the FBM KLCI sustained bearish signals, buy signals on short-term indicators such as the daily slow stochastics and 14-day RSI suggest good potential for a further technical rebound this week.





A decisive push above the 200-day moving average will accelerate the gain towards the next significant resistance from the 100-day moving average at 1,304, while a successful breakout will target the 50-day moving average at 1,324 before more profit-taking and selling resistance emerge to cap the upside.



As for the downside, the 200-day moving average at 1,268 will provide support, with stronger support platforms available at 1,254, the 76.4 per cent Fibonacci Retracement (FR) of 1,224.4 trough to 1,349.9 peak, and then 1,228, the 61.8 per cent FR and 23.6 per cent FR of the 1,153 low of August 19, 2009 and 836 low of March 12 2009 to the 1,349 peak of May 4, which is reinforced by the February 9 pivot low of 1,224.



For this week, investors should look for buying opportunities in oversold blue chips such as IOI Corp, Public Bank and Sime Darby for technical rebound upside, as the 14-day RSI remains oversold. Also, lower liners such as rubber glove makers Adventa and Supermax, construction players MRCB, Tebrau and UEM Land, and oil and gas players Dialog, Kencana and SapuraCrest should rise further as buying momentum picks up.



The subject expressed above is based purely on technical analysis and opinions of the writer. It is not a solicitation to buy or sell.