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Thursday, July 11, 2013

FBM KLCI Futures Preview, Technical Analysis 11 July 2013

Expect futures to trend higher today despite minimal gains in the US market overnight as local sentiments may look towards bullish signals due to encouraging announcement by the Federal Reserve Chairman.

Bernanke’s comments that the Feds will continue its bond buying activities up till the labour market show significance improvement may correlate easing concern of a slowdown in growth in the world biggest economist.

Back home, FBMKLCI gained 0.13 percent to settle at 1768.71. The index traded range bound with an upward bias for most part of the day as sentiments borrowed strength from gains in the US, spurred by better expectations of earning results. Adversely, the upside potential was limited as investors factored in weak external trade data from China, which was made available on the second half of the trading session.

Leading leaders of the index were a mixture of gaming, plantation and telecommunication counters namely Genting, IOI and Maxis. Futures still maintain trading at a premium of approximately 1.5 points from its underlying cash market.
Futures settled on a positive note with gains of 0.06 percent to close the day at 1770. Trading was depicted in the formation of a short bodied black candle signalling that sellers managed to outpace buyers for most part of the day. Sentiments remained generally bullish as prices still remains supported at its 20 and 50 day moving averages.

Prices may open lower but if prices managed to break above its 1770 in early morning trades, investors may opt to go long taking advantage of an upward movement in prices. As such support and resistance can be pegged at 1765 and 1780 respectively.
Intraday Strategy
Trade may long with a stop on or below 1760.

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