The FKLI continued to drift downwards for a third consecutive session, pulling back by 3.50 pts to settle at 1,593 points – which was still below the 1,600-point psychological resistance, RHB Research said in a note
On Wednesday, the index opened at 1,598.50 points and rose to the session’s high of 1,602.50 points. Strong profit-taking near the 1,600-point level sent the index to print the session’s low of 1,592.50 points before the close.
The latest price action shows that 1,600 pts is becoming a stiff resistance. The index may consolidate sideways before making a fresh attempt to retest the psychological resistance. Note that the RSI is moving below the trendline – pointing to a divergence – while trading momentum has softened recently. That said, the 1,586.50-point level should be a strong support point.
Expect the bulls to defend this immediate threshold. For now, RHB maintains a positive trading bias until the trailing stop is triggered. Traders should remain in the long positions initiated at 1,567.50 points, or the close of 16 Mar. To minimise the downside risks, the trailing stop is fixed at 1,586.50 points.
The immediate support is marked at 1,586.50 points – 6 Apr’s low – followed by 1,575.50 points. Conversely, the immediate resistance is pegged at 1,600 pts, followed by 1,608.50 pts or the high of 25 March
