FKLI Opens Lower Despite Regional Uptrends, Expected To Hover At 1487

The FKLI continued to move sideways above the 50-day average line yesterday as it closed just 1 pt higher at 1,476.5 pts – it rebounded from its intraday low to fully recoup the intraday losses. The index opened higher yesterday at 1,478 pts and touched the 1,479-pt day high before falling lower towards the 1,466-pt day low. It then rebounded strongly to close slightly below the opening level. The neutral candlestick with a long lower shadow above the 50-day SMA line suggests the buying pressure is continuing to build up near the support level as the FKLI attempts an initial rebound.

RHB continues to expect the index to oscillate between the 1,464.50-pt support and 1,487.50-pt resistance in the coming sessions. Unless the stop-loss level is breached, we make no change to our bullish bias. RHB recommends traders maintain their long positions initiated at the closing level of 30 Aug, ie 1,510 pts. To minimise the trading risks, the initial stop-loss threshold is set at 1,464 pts. The immediate support is now at 1,464.50 pts – 24 Aug’s low – and followed by 1,450 pts. The first resistance is pegged at 1,487.50 pts – 1 Sep’s high – with the higher resistance at 1,510 pts or the close of 30 Aug.

The FCPO persisted with its downward movement for a ninth consecutive session yesterday as it settled MYR107 lower at MYR3,690, which is the immediate support level. The commodity opened on a positive tone at MYR3,811 and printed a day high of MYR3,848 before selling pressure kicked in to dominate the rest of the session. It then fell towards the session’s low of MYR3,645, where a mild rebound ensued before the close. The latest bearish candlestick, which closed at the MYR3,690 immediate support, suggests the selling pressure is being capped at the support level. Hence, RHB expects the FCPO to remain sideways in the coming sessions before resuming its downwards movement beneath the support level. Amid the “lower low” bearish pattern that remains firm, we stick to a bearish bias.

Traders are recommended to keep their short positions initiated at the close of 1 Sep, ie MYR3,994. To minimise the trading risks, the initial stop-loss threshold is set at MYR4,216. The immediate support is revised to MYR3,690, which was the low of 4 Aug, and followed by MYR3,489 or 14 Jul’s low. On the flip side, the nearest resistance is pegged at MYR4,216 – 1 Sep’s high – and followed by MYR4,364, ie the high of 15 Aug.

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