10 DEC FCPO/FKLI Daily Trading Commentary (Malaysia)

10-12-13

Technical Outlook (FCPO):

CPO surged to high at 2,689 yesterday, near to its previous high at 2,692 but the selling pressure has caused the price tumbled down and close at 2,645. This closing price is still well supported by 20 SMA which is at 2,625 and the daily uptrend channel, point to note where parabolic SAR has now at the bottom of the price and indicate another uptrend will come soon.

From the hourly chart, we can see the hourly closing price is at the supporting line of the uptrend channel, third time in this month since the beginning of December. Price normally rebound after hovering around the supporting line for few more bars. However we noticed –DI has just crossed above +DI, means the correction could go further with the reading that hourly MACD converge at 0, while at the positive territory.

 Trade Recommendation (FCPO):

For intraday traders we advised to long at weakness which is around 2,635 with cut loss at 2,610 (second pivot supporting point) and target profit at 2,676 (first pivot resistance point). Overnight and long term traders can look for opportunity to accumulate long position around 2,630-2,640 with stop loss at 2,595 (below the 2,600 supporting price) and target profit at 2,700.

Technical Outlook (FKLI):

Gap open at 1,839 with close at 1,836.5 indicate very strong uptrend for KLCI in near future, however, daily ADX reading at 46.3 where previously it has a tendency of short term correction after the ADX breach above 45. It combines with the reading of daily RSI at 68, base on the previous pattern it might breach or approach level 70 then correction will come shortly afterwards.

This is line with hourly chart where RSI is at high of 71 since yesterday, looking to trend downwards and the ADX is at 69.1, historical high since 24 October, it indicates trend strength could come to an end with reversal is very likely to happen with –DI coming up from bottom and +DI slipping down.

Trade Recommendation (FKLI):

For intraday traders, we advise to catch the short term correction and can short around 1,840 with target profit at 1,820 and stop loss at 1,850. Overnight or long term traders are recommended to long at weakness which could be around 1,805 to 1,820, with stop loss below 1,800 and target profit around 1,850, it might won’t be happening today hence we shall closely monitor.