The FKLI experienced buying pressure for the second consecutive session, rising 1.50 points to settle stronger at 1,556 points, and is attempting to cross the 1,556.50-point resistance, RHB Research said. On Wednesday, it opened at 1,553.50 points and fell to the day’s low of 1,545 points.
Once the index found its footing, it climbed in the afternoon to touch the day’s high of 1,557.50 points and closed in positive territory. The latest “higher low” pattern affirms that the index has formed immediate support at the 1,534.50-point level.
If the index breaches the 1,556.50-point resistance, RHB said that it expects a follow-through price action to travel towards the 1,578-point level.
It said that despite the bullish momentum gaining traction lately, we observe the Bearish Marubozu that was formed on 6 May remaining intact. “As such, the bears are deemed to still be in control and as such, our negative trading bias remains unchanged,” the research house said.
Traders should retain the short positions, which were initiated at 1,576.50 points, or the close of 5 May. To control the trading risks, the stop-loss is placed at 1,578 pts
RHB said that the immediate support is marked at 1,534.50 points (10 May’s low), followed by 1,518 points, or the low of 8 March. On the upside, the immediate resistance stays at 1,556.50 points (9 May’s high), followed by 1,578 points (6 May’s high)