KUALA LUMPUR:  HLG Research said technically, the growing overbought position and formation of a shooting star (last Wednesday, Sept 15) may entice jittery investors to book profit, thus leading the market to greater volatility in the immediate term.

In its outlook report issued on Monday, Sept 20, it said nevertheless, the bulls are still dominating the floor in the mid to long term and likely to flow to lower liners while any FBM KLCI retreat will likely be short-lived with investors buying on weakness.

On top of mildly positive external economic newsflow and strengthening Ringgit, positive domestic developments like the Economic Transformation Program Open Day on Sept 21, NEM2, Budget 2011 and speculation of Sarawak and general elections are likely to cushion significant correction.

For Bursa, immediate resistance targets are 1,472 (76.4% FR from top 1,525 and low of 1,300), 1,490 (Jan 8, 2008's intraday high) and all-time high of 1,524. Immediate support levels are 1,449 (10-d SMA). Stronger support levels are situated around 1,429 (20-d SMA) and 1,405 (30-d SMA).

For Wall Street, all eyes will focus on the FOMC meeting on Sept 21 as the turning point for stocks that have been searching to break out of the current range with conviction.

"If the Federal Reserve's view of the economy brightens by just a glimmer this week, it could push the Dow above the three-month high of 10,720, and probably to retest the 11,000 psychological level prior to the US mid- term election in November," it said.