The FKLI attempted to stage a rebound last Friday, rising 6.5 points to close at 1,446 points. The index started off the first trading session of July at 1,439.50 points, RHB Research said.
Initially, it fell to the day’s low of 1,436 points. But sentiment improved during the morning session, causing the index to climb towards the day’s high of 1,453 points before pulling back in the afternoon to close at 1,446 points.
It said that the latest session price action shows selling pressure failed to follow through last Friday, as buying momentum has started to pick up again. In this scenario, it is likely the index will consolidate beneath 1,462 points until it manages to break above that immediate resistance.
On the other hand, RHB said that should selling pressure regain strength, the index will drift towards 1,424 points, followed by the 1,400-point support.
As of now, since the immediate resistance remains intact and the index has yet to chart a fresh “higher high”, we deem the bears still in control.
As such, RHB said that it holds on to our bearish bias. Traders are recommended to retain the short positions initiated at 1,524.50 points (7 Jun’s close).
To mitigate the trading risks, the trailing-stop is fixed at 1,462 points. The immediate support remains at 1,424 points, followed by the 1,400-point psychological level. On the other hand, the first resistance is seen at 1,462 points – 22 Jun’s high – followed by 1,488 points, which was the low of 10 Jun.