The FKLI saw profit-taking extend for the second consecutive session, retreating 10 points to settle lower at 1,596.50 points and closing below the 1,600-point psychological level, RHB Research said in a note.
Yesterday, the index gapped down and opened lower at 1,605.50 points. After touching the high of 1,606 points, it experiences selling pressure throughout the session, falling to the session’s low of 1,594.50 points before the close.
The bearish candlestick suggests sentiment is becoming cautious, with the bears gaining strength. If the negative momentum follows though, the index may retrace towards the 1,586.50-point level. Breaching the immediate threshold would confirm the bears are in control. On the other hand, if the index manages to bounce off the immediate support, the bullish structure will be deemed intact.
At this stage, RHB said that it sticks to our positive trading bias until the trailing-stop is breached. Traders should hold on to the long positions initiated at 1,567.50 points, or the close of 16 March.
To protect the downside risks, the trailing-stop is adjusted to 1,586.50 points from 1,575.50 points. The immediate support is set at 1,586.50 points (6 Apr’s low), followed by 1,575.50 points. Meanwhile, the immediate resistance remains at 1,608.50 points (25 Mar’s high), followed by 1,620 points, or the YTD high charted on 16 Feb.
