ZLBT Chats

Thursday, December 29, 2011

A pressured day ahead for FKLI bulls

Preview
Expect futures to trade range bound today with downward bias as US markets slid last night on renewed worries over sovereign debt in the eurozone. Profit-taking activities added to the sell-off as investors booked their profits from the recent end of year rally. Back home, FBMKLCI gained 0.21 percent to finish the day
at 1504.11. The index tested the major resistance level of 1500 from the out-set of trade. However, it fell back to its low of the day at circa 1496 during the mid-point of the morning trade.

From here onwards, the index gradually traded higher with momentum carrying it through 1500 where it settled near its high of the day. Leading movers of the index were Petronas Gas and CIMB. Futures remained a narrow premium over the underlying as expiry draws near.

Technicals
Futures settled marginally higher at 1504.5. A spinning top candle was formed indicating indecisiveness. The bears pressured prices during the early trade. However, the buying interest helped futures recoup the losses. Bullish indicators are still intact as futures held above its 200-day moving average and MACD still on a bullish divergence course. As such, support and resistance levels pegged at 1493 and 1508.

Strategy
Aggressive trade may short with stop on above 1513.

HAPPY TRADING 

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