The FKLI rebounded strongly from the 1328 level (for both the cash and FKLI) even with the regional markets tumbled yesterday. This is indicating investors are still looking for opportunity to buy the shares and the resilient in our market will remain, at least for the month.
However, as long as the trading band of 1320 – 1350 levels is not being taken out convincingly, the FKLI will trap in the tight range trading and investors can in fact take this opportunity to do some short term trading. From technical point of view, although the FKLI is trading below the Bollinger middle band, with the narrowing in upper and lower band, this will keep the FKLI away from experiencing sharp drop and with the slight positive in the overnight US market, we are expecting the FKLI will regain its posture above the Bollinger middle band (1336 level).
As per our weekly report stated, we are in the view that the 1328 level should serve as a good support level and any drop near to/ below this level should give an opportunity for investors to accumulate long position. However, we reiterate that for any position initiated, regardless is long or short, investors should not take too large a position as the market is directionless with range trading opportunity is available only.
The support for today is seen at 1329 level (MA 50) and the resistance is seen at 1340 level. We believe that the FKLI will close the gap set yesterday and trade above the 1336 level. Besides, the cash if able to regain its posture above the MA 30 level of 1337, this will help the cash to resume its near term uptrend momentum.
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