Despite Tinted with Negative Momentum, Downside Risk for KLCI Futures Narrowed

RHB Research has retained its ‘short’ positions on KLCI futures as the bearish sentiment still haunts the KLCI.

The FKLI continued to drift lower yesterday, falling 5 points to settle at 1,425 points. It began Thursday’s session at 1,430.50 points, and rebounded in the morning to test the day’s 1,443-point high. However, the momentum was short-lived, and the index retraced to the day’s 1,422-point low before the close. The latest price action showed that the bears still have the technical advantage. This, coupled with the 50-day SMA line crossing below the 200-day SMA line, shows that the bearish setup has strengthened. The index has yet to form an interim base and should correct to 1,424 points and 1,400 points. A Bearish Marubozu candlestick was formed on 22 June. If the index jumps above the 1,462-point resistance, this may signal a reversal of trend. At this stage, the momentum is still negative, and therefore, the research house is retaining its bearish bias until the trailing-stop is triggered.

Traders are advised to keep the short positions initiated at 1,524.50 points or the close of 7 June. To minimise trading risks,
the trailing-stop threshold is revised to 1,462 points from 1,470 points. The immediate support is marked at 1,424 points, followed by 1,400 points. On the upside, the first resistance is eyed at 1,450 points, followed by 1,462 points, which was the high of 22 June.

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