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Wednesday, June 26, 2013

FKLI to test 1720/17 Support soon

Market Previews
Locally, the FBM KLCI shed 0.55 percent to settle at 1728.64. Losses were in correlation with faltering bourses around the globe which were led by the steep sell-off in Chinese shares. Stocks in China extended a bear market decline on concern that tight credit will deepen the nation’s economic slowdown.

Heavyweight losers locally were stocks from the consumer, banking and energy industries, namely UMW Holding, Hong Leong Bank, Maybank, Public Bank, CIMB, Ambank, Sapura Kencana, PETRONAS Gas and Petronas Chemical. Futures were still traded at a premium of circa 2 point above its underlying cash market.

Futures prices wilted 0.49 percent to close at 1730.50. Trading activities formed an inverted black hammer, which is considered a bottom reversal sign. Moreover, prices settled below its 20 and 50 day moving averages for the second consecutive day, signaling price weakness. Hence, expect technical buying to push prices upwards today to test its 50 day moving average as bottom feeders take advantage of weak prices.
Technical indicators:
MACD= Negative, ADX= Positive
Intraday technical support & resistance for 25th June 2013
1st support 1,720-17; 2nd support 1,700
1st resistance 1,740, 2nd resistance 1,745-50

Traders can attempt a LONG FKLI at Support 1720/17 with a cutloss at 1710

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