THE bullish tone on the KLSE is set to continue and technical analysts are expecting the Composite Index (CI) to test the 800-point range by the end of the year.
Some are, nevertheless, saying there could be a correction in the near term but that should not derail the upward momentum built over the past one and a half quarters.
There will be another rally by the end of the year,'' said K&N Kenanga technical analyst Teoh Cheng Guan.
Doubts over a higher close by the end of the year have been slowly erased during the current rally but analysts do acknowledge that for the CI to move, the blue chips would have to start revving again.
This, they believe, will happen when foreign funds realise that blue chips like Tenaga Nasional Bhd and Telekom Malaysia Bhd have lagged behind and that the entire KLSE offers value compared with other bourses.
What we need is an inflow of foreign money,'' said TA Research technical analyst Stephen Soo, who is guessing that the CI may play catch-up with other regional bourses, given its underperformance this year.
The long-term technical indicators look good. It is not whether the CI will rise, but when,'' he added.
Others, however, disagree that the CI has under-performed, saying it has done well against the pre-financial crisis levels compared with other markets.
On a long-term horizon, we are not doing too badly,'' Teoh said.
Analysts say the political transition at the end of this month is a key for the market and they suspect the market will view the move positively.
OSK Research technical analyst Shin Kao Jack said the next technical target for the CI was 790 and there would be heavy resistance at the 800-point level.
He also believes the theme plays on the KLSE will not end anytime soon.
As long as the bull market continues, concept plays will go on,'' he said. BY JAGDEV SINGH SIDHU