Expect futures to start-off on a positive note after a decent performance on Wall Street overnight. Main driver was an announcement by the Fed to keep interest rates around current levels for the next couple of years in the hope of providing enough stimulus to the economy for a speedy recovery.
Back home, FBMKLCI settled at 1519.76, slightly down by 0.19 percent. The index experienced some buying interest in the opening 30 minutes of trade where it touched its high. However, buying momentum could not be sustained as the bears exerted selling pressure for the remainder of the day. Re-emerging concerns surrounding the Eurozone debt crisis impacted banking counters, resulting in CIMB, Maybank and AmBank leading the index lower. Market sentiment holds positive, futures trades at a large premium of 9 points to the underlying cash.
Technicals
Futures gained 0.23 percent to settle at 1528.5. Buying interest saw futures touch a 5-1/2 month high in early trade. No follow through buying ensued as futures consolidated below 1530. Market on close saw a burst of buying, but futures could not convincingly break out of its range, instantaneously retracting to settle within its 4-week range. A look-a-like spinning top candle was formed indicating indecisiveness as investors eagerly await news from the World Economic Forum where the world’s most influential central bankers will convene to discuss the impact of the sovereign debt in Europe. As such, support and resistance levels pegged at 1525 and 1537 respectively.
Strategy
Aggressive trade may long with stop on below 1525.
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