Selling pressure on the FKLI failed to follow through on Tuesday, and the index rebounded 11.50 points to close at 1,596 points, RHB Research said.
Yesterday, it opened at 1,586.50 points and registered the session’s low at the 1,583.50-point level. Then, in the morning session it jumped on strong momentum and touched the session’s high of 1,597.50 points before the close.
It said that the latest price action shows that the 50-day SMA line managed to cushion the selling pressure while market sentiment improved. As such, the bulls may test the immediate resistance of 1,603 points.
However, based on previous price actions, expect strong selling pressure to emerge near the immediate threshold. Compared to 22 April session, the index has yet to print a fresh “higher high”.
RHB said that it maintained a bearish trading bias until the stop-loss is breached. Traders should stick to the short positions initiated at 1,578 points, or the closing of 18 April.
To mitigate the trading risks, the initial stop-loss is set at 1,603 points. The first support remains at 1,578 points (18 Apr’s low), followed by 1,543.50 points (15 Mar’s low). Meanwhile, the immediate resistance is at 1,603 points, followed by 1,620 points.
