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Careful of Furious Bears! – FKLI 100705

Monday, July 5, 2010

For this week, without hesitation, we will remain our bearish bias towards the market and ready to allow risk averse client to initiate short position if the 1300 level is not able to be maintained for mid to long term trading. Overall market is weak with a lot of technical indicators pointing towards downward pressure.

The important support level of the Bollinger middle band, the MA 100 and the uptrend line seems to be convincingly being taken out. At this level, we are more keen to see whether the 1300 psychological level will be taken out to allow the furious bears to take charge. Failure for this level to being held will trigger a massive selling and major correction is expected to set in.

However, towards the end of the World Cup, market is expected to trade in range between 1295 – 1315 levels for this week. Risk taker investors can continue to initiate short position on strength, however, risk averse investors should only initiate short position if the 1300 level for both the cash and the futures is being taken out convincingly.

[Reminder: US market will be closed tonight in accordance with the celebration of Independence Day.]

The information herein was obtained or derived from the source that we believed are reliable.No liability can be accepted for any loss that may arise from the use of this report.All opinions and estimates included in this report constitutes our judgement as of this date and are subject to change without notice.


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