The research house is maintaining its ‘LONG’ positions on the futures of KLCI despite the negative momentum seen at this moment.
Strong profit-taking activities yesterday led the FKLI to shed 14.5 points to close at 1,581 points – drifting away from the 1,600-point psychological level. The index opened at 1,595.50 points. After touching the session’s high of 1,598 points, it trended south throughout the session amid strong selling pressure. The long bearish candlestick shows that the bears had the edge over buyers. Also, the RSI is falling below the trendline, suggesting that the negative momentum is picking up pace again.
If the selling activities are extended, the index may retreat towards the 1,566.50-point level or test the 50-day SMA line. On the other hand, the research house expects buying pressure to emerge near the 50-day moving average line. Hence, the research house is maintaining their positive trading bias until the stop-loss is triggered.
RHB Research’s recommendation is, traders of KLCI futures should stick to the long positions initiated at 1,567.50 points, or the closing level of 16 March. To manage the downside risks, the initial stop-loss is set at 1,566.50 points. The immediate support is now at 1,566.50 points (24 February’s low), then 1,541 points or the low of 17 January. The immediate resistance is pegged at 1,608.50 points (25 March’s high), followed by 1,620 points.
