THE FBM Bursa Derivatives Malaysia Composite Sp0t Month Index futures closed at 1,390 with an open interest of 17,205 contracts. The resistance at 1,380 was soft last week when futures contract penetrated above this line to close at 1,390 last Friday against the backdrop of a higher cash index.The decisive break above this line is yet another milestone for the futures contract as it signals the domineering uptrend pattern in the long-term view. The presence of the bullish candlestick pattern on the daily chart is yet another positive reminder of the bullish pace.
Beginning from late July this year, the positive "V" daily chart formation marked the commencement of a technical rebound which is now at the tail end. This bullish pattern with its beginning at 1,334 level which is now more than 50 points higher.However, moving forward based on the depth of the previous correction, any weak correction from current level may open opportunity to reload as the spot contract has finally broken the previous consolidation band.
The weekly chart remains vibrant as it has realised the strong results from the daily counterpart and now posing a concern to the bears. The slow but steady climb may have posed a headache to the structural bears. Tactically for this week the spot contract may continue to head up after breaking from the 1,380 resistance mark. The presence of month-end convergence may force the premium in the market to be narrowed and the August may tail the cash index closely. Notwithstanding this "technical" issue, medium term direction of the contract may likely challenge the 1,400 level.
FKLI Recommendation
Buy on dip / selloff
Preferably during forced selling / margin calls
Target 1400 Stoploss 1380
No comments:
Post a Comment