KUALA LUMPUR: HLG Research said the ability for FBM KLCI to close above the 10-day SMA is crucial for a short term revival to the Malaysian market.

It said on Tuesday, Sept 28 that Monday's index closing was still two points below the 10-day SMA, it remains cautious of the rebound and consolidation should prevail to neutralize current overbought positions.

"Despite anticipating near term volatility, the FBM KLCI mid to long term outlook remains bright as long as it stays above the uptrend line around 1,390, as well as supported by the ringgit strength," it said.

HLG Research said the market's immediate resistance is now seen at the recent high of 1,479.6 (Sept 21), followed by 1,490 (Jan 8, 2008's intraday high), the 1,500 psychological hurdle and all-time high of 1,524. The latter two should see heavier profit-taking capping upside.

For the Dow Jones Industrial Average, key economic data will be watched for further clues on whether the economic recovery is still on track and if the market's recent rally is justified.  Major announcements are September consumer confidence (Sept 28), August consumer spending (Oct 1) and ISM index (Oct 1).

The research house said with positive technical readings after breaching the three-month high of 10,720, higher resistance targets are at 10,920 (May 12's high) and year-to-date high of 11,258 (April 26). Immediate supports are situated around 10,500-10,600.