Once again, RHB Research has maintained long positions on KLCI futures due to low downward risk.
The FKLI failed in its latest attempt to cross above the 1,525-point resistance, pulling back 1 point from the previous session to close at 1,519 pts. After a Shooting Star formed during Tuesday’s session, the index started off Wednesday at 1,519 points. It initially rose higher to test the USD1,524.50 day high, but then gave up the intraday gains to close at the opening price of 1,519 points. The Doji candlestick showed both bulls and bears shared equal strength yesterday. The latest closing price of 1,519 points was higher than the previous session’s low of 1,517.50 points – hence selling pressure was not strong. As such, the Shooting Star did not dampen market sentiment. This leads us to believe the downside risk is low and that the bulls may stage an upside breakout in the near future. Breaching the immediate resistance will lift the FKLI towards 1,550 points. In the event the bulls step back, the index may retrace towards the next support at 1,494 points. As long as the trailing-stop point stays intact, no change to positive bias.
Traders are recommended to retain the long positions initiated at 1,450.50 points or 21 July’s close. For trading-risk management, the trailing-stop threshold is fixed at 1,494 points.
The immediate support sticks at 1,494 points – 8 August’s close – and is followed by 1,480 points, ie the high of 13 June. The immediate resistance remains unchanged at 1,525 points – 24 May’s low – and followed by 1,550 points
