The FKLI failed to stage a meaningful rebound on Thursday, fell 0.5 points to close at 1,581 points. It opened at 1,580.50 points. Early in the day, the index rose to test the session’s high of 1,587.50 points, RHB Research said in a note
However, RHB said that the bulls failed to follow through and gave up the bulk of the intraday gains, so the FKLI hit the session’s low of 1,575.50 pts before closing. The index has printed the fourth candlestick with a lower high, compared to 25 Mar’s high of 1,608.50 pts.
It said that a series of “lower highs” indicates that the bulls are weakening. If the index breaches the immediate support of the 1,575.50-pt level, expect selling pressure to drag the index lower.
“For now, the index may consolidate sideways above the immediate support. We will maintain a positive trading bias until the stop-loss is triggered. We recommend that traders stick with long positions initiated at 1,567.50 points or the closing level of 16 March,” it said.
To manage trading risks, the stop-loss has been adjusted upwards to 1575.50 points from 1,566.50 points. The immediate support is now at 1,575.50 pts (29 Mar’s low), followed by 1,566.50 pts or the low of 24 Feb. On the other hand, the immediate resistance was still pegged at 1,608.50 pts (25 Mar’s high), then 1,620 pts.
