ZLBT's FKLI Outlook >>> 10 June 2011

FKLI Preview
Look for futures to trade range bound with upward bias, tracking overnight Dow which snapped its six consecutive losing streak and staged a technical rebound as well as record export figures, hence muted the marginal rise in jobless claims. On local front, FBMKLCI settled timidly lower as losses seen in select blue chips, namely TNB, Genting Malaysia and UMW, along with lackluster regional markets.

Sentiment turned upbeat with futures closed premium against its underlying cash. On the side note, following semi-annual review of FBMKLCI Advisory Committee, Malaysia Marine and Heavy Engineering (MMHE) will replace Malaysian Airline System (MAS) effective June 20.

Again, futures traded within its consolidation limbo of 1543- 1558 as it failed to break its upside resistance and subsequently shy off its high. Besides that, MACD is poised to form the bearish crossover, but further confirmation is needed. Sellers likely to continue to guard the immediate resistance of 1558.

Next resistance would be seen at 1568 if futures able to break out from the zone as any violation from it will lead to the establishment of new trend. To the downside, support is expected at 1544.
Trading Strategy

Long with stop on close below 1525.