RHB Research has maintained “long” positions on KLCI futures.
The FKLI underwent strong selling pressure last Friday, and closed 15 points lower at 1,504 points – the biggest loss since 26 July. It opened at 1,519 points, then printed the day’s high of 1,523 points before the bears gained momentum in the afternoon and dragged the index downwards to its close. The negative price action also led to a Bearish Marubozu, and erased the weekly gains. The latest bearish candlestick also affirmed that the Shooting Star formed on 17 August has become the top – and the bears have the technical advantage now. The bulls need to climb above the resistance to negate the bearish candlestick. If selling pressure continues and the FKLI breaches the 1,494-point support, strong bearish pressure would open the door to a downward correction. Expect the bulls to defend the support at the 1,494-point level. For now, the research house will maintain a positive bias until the trailing stop is triggered.
Traders should hold on to the long positions initiated at 1,450.50 points (21 Jul’s close). To manage trading risks, the trailing-stop is set at 1,494 points.
The immediate support remains unchanged at 1,494 points – 8 August’s close – followed by 1,480 points or the high of 13 June. The immediate resistance stays at 1,525 points – 24 May’s low – followed by 1,550 points.
