FBM KLCI Inched Up Higher Tracking the Overnight Rally of Wall Street

The FBM KLCI opened at 1,392.92 as compared to Monday’s close at 1,386.27.

For the first half hour of the morning trading session, the index oscillated between 1,392.92 – 1,397.89.

The KLCI is expected to rally following the bullish performance of Wall Street overnight. The DJIA gained 1.86% while Nasdaq jumped 3.43%.

Technical Analysis on FKLI

RHB Research has maintain short positions KLCI futures (FKLI).

The FKLI rebounded from its intraday low to close on a mildly positive tone yesterday, up 3 points to 1,386.5 points – below the previous session’s high. It opened weaker at 1,377.5 points and fell to the 1,372-point low before rebounding strongly towards the end of the session to close on a positive tone – touching the 1,387-point high near the close. The second consecutive bullish candlestick reiterates the bullish engulfing pattern formed last Friday.

However, it has yet to close above the 1,398-point resistance level to negate the “Bearish Breakaway Gap” formed on 11 Oct. Therefore, the positive momentum is likely to be short-lived if it does not breach above the 1,398-point immediate resistance. Given the low RSI at 35%, “lower low” bearish pattern, and as the index is still trading below the 50-day and 200-day SMA lines, the research house is sticking to its negative bias.

Traders should keep the short positions initiated at 1,384.50 points, or the closing level of 12 Oct. To mitigate trading risks, the stop-loss is set at 1,418 points.

The immediate support is set at 1,360.5 points, followed by 1,350 points. On the other hand, the immediate resistance is pegged at 1,398 pts – 7 Oct’s low – followed by 1,418 pts, or the high of 26 Sep.

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