The FKLI failed to cross above the 1,600-point resistance and instead fell 1.00 points to settle at 1,592 points. On Thursday, the index gapped down on cautious sentiment, opening lower at 1,591.50 points, RHB Research said in a note.
After setting the session’s low at 1,589 points, it jumped above 1,600 points and tested the session’s high of 1,602.50 points. However, profit-taking activities during the afternoon session sent the index lower to close near the session’s low.
The long upper shadow suggests the bulls are getting weaker while the 1,600-pt resistance is becoming stronger. The index may continue to consolidate and retest the 1,586.50-point support.
Amidst the weakening momentum, we expect buying pressure to emerge near the immediate support.
RHB Research said that it keeps to its bullish trading bias until the trailing stop is breached. Traders are recommended to stick to long positions initiated at 1,567.50 points, or the close of 16 March.
To protect the downside risks, the trailing stop is placed at 1586.50 points. The nearest support is marked at 1,586.50 points (6 Apr’s low), followed by 1,575.50 points. On the other hand, the immediate resistance stays at 1,600 points, followed by the higher hurdle of 1,608.50 points, which was high of 25 March.
