Mid Day Market Update: KLCI Skidded for First Half of the Trading Day; HSI Futures Retesting 22,000 Pt Resistance

FBM KLCI opened lower at 1,523.31 this morning and closed at 9.27 lower or -0.61% for the first half trading day. KLCI is expected to whipsaw with downside bias given the lack of fresh new leads or positive catalysts, it is noteworthy that market participants anxiously wait for US inflation data this Friday, which will offer cues on the interest rate outlook.

Hang Seng Index Futures: Testing The 22,000-Pt Resistance

RHB Research continues to maintain ‘long’ positions on HSI futures.

The HSIF extended the upside movement yesterday, rising higher to test the 22,000-point resistance. During the day session, it opened at 21,640 points and climbed to touch the 21,920-point day high. The index then extended the positive movement during the evening session, adding 133 points – it last traded at 21,982 points. The price action showed the bulls have a firm grip on the HSIF and are taking it higher – it is now eyeing to cross the 22,000-point psychological resistance. If the index breaches this threshold, we expect follow-through price actions to test the higher resistance at 22,535 points. The 20-day SMA line is also trending higher and, if it crosses above the 50-day SMA line, this will enhance the bullish set-up. Both moving average lines will provide downside support should the HSIF experience profit-taking in the coming sessions. Pending a breakout above the 22,000-pt resistance, positive bias is retained.

WTI Crude :  Renewing The Bullish Momentum

The research house is keeping to ‘long’ positions.

The WTI Crude renewed its bullish momentum yesterday after surpassing the immediate resistance – it closed USD2.70 higher at USD122.11, negating the previous “Gravestone Doji” bearish signal. The black gold began on a positive tone at USD119.79. It briefly touched the day’s low of USD119.30 before climbing higher towards the end of the session where it hit the USD123.18 day’s high before retreating mildly at the close. The renewed bullish momentum – which draws a fresh “higher high” bullish pattern – signifies the uptrend continuation in the coming sessions. Hence, the WTI Crude is expected to propel northwards towards the USD130.50 resistance in the near term – riding on the strengthening of the RSI towards the 70% level. With that, the research house is sticking to its bullish trading stance. 

COMEX Gold:  Moving Horizontally Along The 20-Day SMA Line

‘Long’ positions are being maintained on COMEX Gold.

The COMEX Gold extend its consolidation movement on Wednesday. This was after adding USD4.40 from the previous session to close at USD1,856.50. The commodity began the session at USD1,855 and, after moving within a tight range of USD1,846.60 and USD1,862.40, it closed at USD1,856.50 – higher than the opening price. The bullish body candlestick showed the bulls have the technical advantage vis-à-vis the bears. The RSI is seen as trending higher, indicating that the bullish momentum is building up. In the event the RSI crosses the 50% threshold, it is expected the momentum to accelerate and lift the COMEX Gold to test the immediate resistance at USD1,875. Although the commodity is still consolidating sideways, the probability of seeing an upside breakout is higher now. As such, the research house continues to keep to a positive trading bias.

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