The FKLI bounced off the immediate support amid moderation in selling pressure and climbed 12 points from Thursday’s close to close at 1,437 points last week, RHB Research said.
It opened on Friday at 1,427 points and rose to test the day’s high of 1,442 points before the close. The latest session created a candlestick with a shaved lower shadow, showing that the bulls were stronger than the bears.
If the index continues to trend upwards further, it may test the 1,450-point spot, followed by the resistance level of 1,462 pts. Breaching above both points would negate the Bearish Marubozu candlestick and form a bullish reversal pattern.
However, RHB Research said that it expects strong selling pressure to emerge near the resistance level. We will maintain a bearish bias until the trailing-stop is triggered. We recommend that traders remain in the short positions initiated at 1,524.50 pts or the close of 7 Jun.
To manage trading risks, the trailing-stop is placed at 1,462 pts. The immediate support is set at 1,424 points, followed by 1,400 points. Meanwhile, the nearest resistance is pegged at 1,450 points, followed by 1,462 points or the high of 22 Jun.
