ZLBT Chats

Wednesday, January 4, 2012

FKLI may continue range trading

Expect futures to trade higher today taking cue from overnight US markets. Wall Street was spurred on by encouraging economic data showing that manufacturing sector growth was at
its highest in 6 months. On the home front, 2012 got off to a dismal start as the FBMKLCI fell 1.12 percent to finish the day at 1513.54. The index opened lower and proceeded to trade lower throughout the day. Profit-taking activities was the main catalyst as investors booked their profits given the large gains towards the close of 2011. Banking stocks were the primary lags on the index with banking heavyweights Maybank, CIMB and Public Bank leading the way. Market sentiment is positive as futures reversed its position to the underlying cash to 11 points.

Futures settled at 1524.5, up 0.20 percent. Futures traded range bound throughout the day to eventually form a short-bodied white candle. Volume remained light with many investors still on
their festive breaks. Indicators remain bullish as futures still holds well above its 200-day moving average and MACD continues to diverge against its 9-day moving average. As such, support and resistance levels pegged at 1518 and 1536 respectively.

Strategy : Aggressive trade may long with stop on below 1518

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