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Thursday, April 5, 2012

FKLI Previews And Technicals 05 Apr 2012

Expect futures to trade lower today after a poor performance in the overnight US markets. Markets were spooked after the Fed’s declaration on monetary was deemed to hurt the global recovery, on top of this, a poorly received Spanish bond auction indicated the euro-zone debt crisis is still in murky territory.

Back home, FBMKLCI retreated below 1600 level to settle at 1599.27, down 0.46 percent. The index traded gradually lower throughout the day as investors priced in the affect of less monetary stimulus in the US. Banking counters CIMB and Maybank weighed heaviest on the index. Market sentiment remains in negative territory with futures discount to the underlying cash widening to circa 8 points.

Futures settled at 1591.5, down 0.72 percent. Futures upwards momentum has been halted as investors concerns about the global economic recovery resurfaced after the Fed announced another round of quantitative easing was unlikely. Prices fell below major psychological level of 1600 in early trade, and quickly disintegrated to settle at its low of the day. MACD on the verge of a bearish crossover, whilst investors continue to stay sidelined as they weigh up the prospect of a world without monetary stimulus. 

As such, FKLI intraday support and resistance levels pegged at 1578 and 1596 respectively.

Intraday Trading Strategy
Aggressive trade may short with a stop on or above 1596.0

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