The FKLI failed to break past the immediate resistance of 1,480 point, even though it rebounded 7 points yesterday to close at 1,462 points, RHB Research said.
The index opened at 1,458 points. At one point during the morning, it tested the session’s high of 1,476 points, but the bullish momentum waned in the afternoon and the index ceded most of the intraday gains before closing.
The latest session shows that the sentiment remains weak, and the 1,480-point resistance is becoming harder to meet. However, if the index crosses above the 1,480-point resistance, this may attract fresh buying interest and the index may rally towards the 1,500-point psychological level.
On the other hand, breaching below the 1,450-point support would also open the door to a sharp correction towards the 1,420-point level.
For now, RHB Research said that it may continue to see range-bound movement between 1,480 points and 1,450 points until the index breaches either side of the boundary. Pending a breakout, we make no change to our negative bias.
RHB said that traders should stay with the short positions initiated at 1,524.50 points (7 Jun’s close). To minimise the trading risks, the trailing-stop threshold is set at 1,480 points.
The immediate support has been adjusted to 1,450 points, followed by 1,420 points. On the other hand, the immediate resistance is pegged at 1,480 points, then 1,500 points.
