Once again, the FKLI has failed to cross above the 200-day SMA line. It retraced 3 points to settle at 1,545.50 points – indicating that it has yet to form a fresh “higher high”, RHB Research said.
Yesterday, it opened higher at 1,550.50 points and rose to test the day’s high of 1,557 points. The bullish momentum failed to stay above the 1,556.50-point resistance, retreating to the day’s low of 1,543 points before closing.
It said that the 1,556.50-point immediate resistance remains intact and the index closed below the 200-day SMA line. The FKLI should consolidate sideways before it can launch a fresh attempt to move beyond the resistance.
RHB Research said that the selling pressure increases, the index should pull back towards the 1,528-point support. Since selling pressure persists near the immediate resistance, we make no change to our negative trading bias.
Traders should hold on to short positions initiated at 1,576.50 points, or the close of 5 May. To control the trading risks, the trailing stop is placed at 1,558 points.
The immediate support remains at 1,528 points – 12 May’s low – followed by 1,518 points or the low of 8 Mar. Towards the upside, the immediate resistance is at 1,556.50 points – 9 May’s high – followed by 1,578 points or the high of 6 May.
