According to analysts the cautious mood among market players might be subsiding and the FTSE Bursa Malaysia KLCI (FBM KLCI) expected to challenge the 1,500-Point again this week due to the renewed optimism that the probability of global recession is reduced.
Taking a look at the technical analysis on KLCI futures. According to the RHB Research technical analyst, The FKLI climbed higher last Friday as bullish momentum gained pace. The index opened at 1,479 points and rose to test the session’s high of 1,487 points before closing at 1,485 points. The latest price action saw it printing a fresh “higher high” with a “higher low” bullish pattern. The RSI indicator has crossed above the 50% threshold, and suggests that the bullish momentum is in play now.
If the index breaches the 1,487.50-point immediate resistance, it should travel towards the recent high of 1,510 points. On the flip side, should the bulls decide to take profits, the index may retrace towards the 1,464.50-point level. With the bulls still in control now, hence the research house will keep to a positive bias.
Traders remain in the long positions initiated at the closing level of 30 Aug, ie 1,510 points. To minimise the trading risks, the initial stop-loss threshold is set at 1,464 points.
The immediate support is still at 1,464.50 points – 24 August’s low – followed by 1,450 points. The immediate resistance is pegged at 1,487.50 points – 1 Sep’s high – while the higher resistance remains unchanged at 1,510 points, ie the close of 30 August.
