The research house has maintained ‘short’ positions on KLCI futures as it has been trading below the 50-day SMA line.
The FKLI stayed above the 200-day SMA line yesterday, and gained 1.50 points to close at 1,554 points – a shade below the immediate resistance of 1,556.50 points. It opened at 1,553 points, then fell to the day’s low of 1,542.50 points, but bulls seized the bargain and lifted the index to the day’s high of 1,556 points before closing. This shows buying pressure is present near the long-term moving average line. Although the index retained the long-term trend, over the shorter period, it has been trading below the 50-day SMA line – which indicates that the correction is underway.
Breaching the 1,556.50-point resistance may set the stage for a counter-trend rebound. Otherwise, falling below the 200-day SMA line would see the selling pressure increase again. For now, the research house is maintaining a negative trading bias until the trailing-stop is breached.
Traders of KLCI futures are advised to stick to the short positions initiated at 1,576.50 points, or the close of 5 May. To manage trading risks, the trailing-stop is set at 1,563. The immediate support is now at 1,528 points – 12 May’s low – followed by 1,518 points or the low of 8 March. Conversely, the immediate resistance remains at 1,556.50 points – 9 May’s high – followed by 1,578 points or the high of 6 May.
