The research house continues to maintain ‘long’ positions on FKLI.
The FKLI continued to undergo selling activities for the third consecutive session last Friday, retracing 11.50 points and settling weaker at 1,538 points as it closed below the 200-day SMA line. The index initially began the session at 1,550 points and rebounded to test the 1,555-point day high. After hitting the intraday high, the momentum reversed towards the 1,534.50-point day low before the close. The latest price action saw the FKLI breaching below the previous support of 1,540 points and showing early signs of the bulls becoming weaker. If the weakness extends, the index may pull back and test the 1,528-point support.
However, the research house observed that the 1,528-point support has been tested at least twice and remains intact in May. Hence, it is believed the bulls will stage a rebound in the event the FLKI re-tests the immediate threshold. On the upside, the index has to break past the 1,550-point level or reclaim the 200-day SMA line to resume the upside movement. At this stage, the trend will retain its bullish bias.
Traders are advised to keep to the long positions initiated at 1,552 points or the close of 31 May. To manage the trading risks, the initial stop-loss threshold is set at 1,528 points. The immediate support revised to 1,528 points – 12 May’s low – and followed by the 1,500-point round figure. Conversely, the immediate resistance adjusted to1,550 points – 3 Jun’s open – and followed by 1,565 points, i.e. the high of 1 Jun.
