The FKLI’s momentum further decelerated on Monday, falling 10 points to settle weaker at 1,578 points – heading south towards the 1,575.50-point support, RHB Research said.
The index started off Monday’s session on negative sentiment, gapping down and opening lower at 1,586.50 points.
After touching the day’s high of 1,588 points, it reversed to close at the day’s low of 1,578 points. The bearish candlestick with a shaved lower shadow, suggests the bears are at full strength now. Coupled with the index breaching the previous support of 1,586.50 points and falling below the 50-day SMA line, these confirm that the bears are in control now.
With the bearish setup, the negative momentum should drag the index towards 1,575.50 points, followed by the lower support at the 1,543.50-point level.
As of now, RHB said that it was shifting over to a negative trading bias. We closed out the long positions after the trailing stop at 1,586.50 points was triggered. Conversely, we initiate a short position at the closing of 18 Apr, ie 1,578 points.
To manage the downside risks, the initial stop-loss is set at 1,603 points. The immediate support revised to 1,575.50 pts (29 March’s low), followed by 1,543.50 points, or the low of 15 Mar. Meanwhile, the first resistance has been changed to 1,591 points, followed by the 1,600-point whole number.
