KUALA LUMPUR: HLG Research said on Thursday, Sept 30, that technically, the positive crossover in the daily slow stochastic indicators could signal short term stability for the market and cushion more severe correction ahead.

In its market outlook, it said for the FBM KLCI to launch another rally above the year-to-date high of 1479.6 (Sept 21), the five-day SMA has to cross above the 10-day SMA.

"Given that the MACD indicator is still trending down with no signs of reversal yet, the index will continue to be stuck in consolidation mode for a while to neutralize current overbought positions," it said.

HLG Research said the immediate resistance is seen at the recent high of 1,479.6 pts (21 Sep), 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. Immediate support levels are situated at 1,453 (20-day SMA), 1,445 (last week's low) and 1,433 (30-day SMA).

For Wall Street, key economic data for the rest of this week are weekly jobless claims (Thursday night), Sept Chicago PMI (Thursday night), Sept ISM and consumer sentiment (Friday).

Immediate resistance targets are 10,920 (May 12's high) and year-to-date high of 11,258 (April 26). Immediate supports are situated around 10,500 to 10,600.