In US and Europe, most of the fundamental weaknesses behind the downtrend in risk assets in the first half of 2010 have not materially improved. The signs of a genuine recovery remain shaky – jobs, spending, real estate, construction and banking, longer term resolution of the sovereign and private debt levels all remain weaker than we would expect in the early stages of a real recovery.

In the local news, FDI issue was the centre of attention among the politicians and economists. The World Foreign Investment Report (WIR) 2010 released by the United Nations showed that FDI in Malaysia plunged 81 per cent last year, trailing behind countries like the Philippines, Vietnam, Thailand, Indonesia and Singapore. This is the second data that showed that we have fall behind Singapore

With ringgit on the uptrend, the local stock market managed to register a strong moved upward with a price gap early of the week. FBMKLCI was on the uptrend for six straight days and making a new high for the year.

At current level the indicators are showing signed of overbought and a correction in the near future is expected. The FBM KLCI has been tacking the upper Bollinger Band and has a great positive difference with 20 SMA.

Last week with the Index closing at 1360.92, my 161.8% fibo retracement target was achieved. Any price correction could be determined after a bear candle is formed. Next week. I am expecting FBM KLCI to move in the range between resistance level at 1365.85 and support at 1353.15.