Expect futures to trade range bound with downwards bias. Overnight US markets fell after weak labour data was published. Eurozone debt worries still linger despite Spain selling all its bonds at auction, although at higher prices. Back home, FBMKLCI settled at 1596.62, down 0.14 percent. The index traded range bound with a downwards bias. Despite an encouraging start to the day with the index trading above 1600 level, it could not be sustain and eventually retreated to finish near its low. With the resurfacing of euro debt worries, it came as no surprise that a trio of banking stocks weighed heaviest on the index, these were CIMB, Maybank and Public Bank. Market sentiment remains negative as futures trades at circa 3.5 points to the underlying cash.
Futures settled at 1593.0, down 0.06 percent. After a slightly higher opening, futures proceeded to trade range bound with a slight downwards bias. A lack of fresh leads resulted in an uninspiring trading session as most investors preferred to stay sidelined, highlighted by meager volume. Investors will look to buy on weakness. MACD continues on a bearish divergence path, and futures hover just above its 20-day moving average.
As such, support and resistance levels are pegged at 1586 and 1598 respectively.
Aggressive trade may long with a stop on or below 1586.0