Bearish Structure Still Spooks KLCI Futures

RHB Research has retained “short” positions on KLCI futures.

The FKLI attempted to stage a rebound last Friday, despite dipping by 1 point from the day before to close the week at 1,417.50 points. It opened at 1,415.50 points, then oscillated between 1,419.50 points and 1,413.50 points before closing. The index also charted a “higher low”, indicating that bearish pressure is easing off – but it has yet to form a new “higher high”. The latest price action suggests that the bulls area still very weak, while the bears are taking a breather. The index may climb towards the 1,437-point resistance, but strong selling pressure might just emerge again to prevent it from trending higher. That said, a breach of the immediate resistance point may indicate that the trend could change direction in the sessions ahead. Meanwhile, if the index resorts to a correction, it should retrace towards 1,400 points, followed by 1,388 points. For now, the research house has stated in its technical analysis report that it has not seen a bullish reversal pattern nor a “higher high” bullish pattern – and, as such, will stick with our negative bias.

Traders are advised to maintain the short positions initiated at 1,524.50 points (7 June’s close). To minimise the trading risks, the trailing-stop is fixed at 1,450 points. The immediate support stays at 1,400 points, followed by 1,388 points. Conversely, the nearest resistance is still at 1,437 points (24 Jun’s close), then 1,450 points

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