The FKLI failed to establish an interim base yesterday, and extended the correction for the eighth consecutive session, plunging 34.50 points to close at 1,456 points – taking it one step closer to the 2-year low of 1,449 points, RHB Research said.
It opened on bearish sentiment, gapping down at 1,480 points, then declined throughout the session to print the low of 1,452.50 points before closing.
It said that the long bearish candlestick breached the previous support of 1,480 points and 1,460- point levels.
Note that the RSI has fallen into the oversold level, which indicates that a technical rebound is around the corner. In the event the index climbs back above 1,480-point resistance, this would indicate the start of the technical rebound.
Before that happens, RHB said that the index should continue drifting lower in the oversold region, until it forms a bullish reversal candlestick. For now, we are maintaining a negative bias. We recommend that traders stick to the short positions initiated at 1,524.50 points (7 Jun’s close).
To manage the trading risks, the trailing stop has been adjusted to 1,506 points, from 1,524 points. The immediate support has decreased to 1,440 points, followed by 1,420 points. Conversely, the first resistance is now at 1,480 points, then 1,500 points
