Expect futures to trade lower today upon staging another record high yesterday. US stocks ended little change after violating fresh peaks yesterday despite stronger than expected retail sales data reported in April which indicates rising consumer strength.
Nevertheless, resilience in the healthcare sector managed to provide strong support against profit taking activities, whereby
investors took a pause after the recent rallies. Back home, the FBM KLCI traded steadily higher throughout the day, climbing 0.88 percent to end at 1787.90.
This marks the third all-time high closing price recorded since the General Election was concluded on May 5th. Gains in the local bourse correlated with strong performance in the US market which rallied to close at another record high last Friday. Amongst the outperforming stocks were Petronas Gas, Petronas Dagangan, and PPB Group. Futures now trade at a wider discount of approximately 6 points below its underlying cash market.
Technicals
Futures prices rocketed 0.73 percent before closing at a fresh record at 1782. The formation of a white candle with a shaven bottom emphasizes the strong bullish force witnessed in the trading session. However, do expect slight consolidation on prices today as RSI indicator is showing sign of being overbought. Hence, do expect price direction to be uncertain whilst a break below its first support at 1775 will exacerbate selling pressure. As such, prices are expected to trade between a support and resistance of 1775 and 1795 respectively.
Intraday technical support & resistance for 14/05/2013
1st support 1,775; 2nd support 1,765-60
1st resistance 1,786-95, 2nd resistance 1,800
Strategy
Trade may short with a stop on or above 1795.
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