With market sentiment shrouded in downbeat mood, negative momentum gathering pace on the KLCI futures. Thus, the research house is maintaining ‘SHORT’ positions.
After several failed attempts to cross above the 200-day SMA line, the FKLI underwent strong selling pressure on Tuesday, and sank 15.50 points to close at 1,530 points. It opened at 1,547 points. After printing the day’s high of 1,550 points, it retraced to the day’s low of 1,525 points before closing, thereby registering a long bearish candlestick.
The negative price action indicates that the index is resuming its downward movement. In the event the index breaches below the 1,528-point support, it will correct towards the 1,518-point level. Meanwhile, the 1,556.50-point level has become a strong resistance. As the negative momentum is in play now, the research house is holding on their bearish trading bias.
Traders of KLCI futures are advised to maintain the ‘short’ positions initiated at 1,576.50 points, or the close of 5 May. To mitigate the trading risks, the trailing-stop is set at 1,558 points. The immediate support stays at 1,528 points (12 May’s low) while the lower support is marked at 1,518 points or the low of 8 Mar. Conversely, the immediate resistance is pegged at 1,556.50 points (9 May’s high), followed by 1,578 points or the high of 6 May.
