The FKLI resumed its correction phase after recently breaching the support level – it closed lower at 1,662.50 pts. Amidst the risk-off sentiment, the index trended lower and opened at 1,685.50 pts. After touching the day’s high of 1,699.50 pts, it moved lower throughout the session, hitting the day’s low of 1,662 pts and closing at 1,662.50 pts with a long bearish candlestick. The latest bearish breakout, coupled with the RSI rounding downwards, shows that strong bearish momentum is in play. The index should move lower towards the immediate support at 1,650 pts. Both the 50- and 200- day SMA lines are trending lower, putting downward pressure on the FKLI.
RHB said it will retain the negative trading bias until the index closes above 1,745 pts.
RHB in its research note recommend that traders retain the short position initiated at the close of 29 May (1,680 pts). To mitigate trading risks, the stop-loss threshold is set at 1,745 pts.
The first support is now at the abovementioned 1,650 pts, followed by 1,600 pts. The initial resistance is at 1,700 pts, while the higher resistance level is at 1,745 pts.
