Chart time...

I had several strong requests for me to post some charts on FKLI (Futures KL Index) market and a little "insight" about it. Initially, this blog was mainly supposed to be just more on what my views and thoughts throughout this journey of mine. Anyhow, due to those strong requests, i shall pop in a chart or two from time to time on the futures market in Malaysia.

Now again, i always stress in "doing your own analysis" is because views are just views. They are not the "holy grail" for investments. Even the so-called-experts in the financial world tend to be wrong too. Hence, in other words, learn the trade or walk. A mentor of mine had always mentioned that never depend on tips or views as they will in time confuse you. Learn the trade, know yourself, plan your strategy and go for it. That's all it is.

Ok, as of today, 1st of April 2013, the KLCI and FKLI had really been playing tricks onto investors and traders. Fundamentally, as we all know, we have the elections around the corner. It's just a matter of time and everyone is actually waiting for our "expired" PM to announce when the parliament would be dissolved. It seems to be taking forever! This had made shorters curse like mad as elections should be held soon already. However, till now, parliament is yet to be dissolved. Hence, if we take away that factor of the elections, KLCI and FKLI are still on the strong note. Refer to FKLI Daily chart below.

FKLI Daily Chart as of 1st April 2013

From the technical point of view, it could be a start of a bear reversal after a strong bullish move. For the past 3 candlesticks, showing a doji with the other two small hammer and a gap down on today's candle, it has showed that bears are starting to come in but also with caution. To me, both bulls and bears are trading with caution but those bears that has big capitals are probably not too worried as they have the staying power. Today's movement was a little frustrating for the bears as it dropped pretty sharp right to 1652 but it rebounded all the way up and closed in the green territory at 1664.5 leaving a long shadow again which also shows that the FKLI is still strongly supported from any sharp declines. Candlesticks are still trading above 100EMA which shows that bulls may still be in power.

The beige region shows that the FKLI is doing a very very obvious and big head and shoulders pattern. Something which i have talked about that would form especially near elections in my previous post. Prices and MACD-H are tracing a bearish divergence which can be very suspicious if FKLI continues rising with a shorter MACD-H. Today, MACD-H traced a lower/red histogram which shows that volume and price action towards the bulls are wearing down. Force index dipped slightly below the 0 line showing that bears may continue to reign. 

Despite all these, FKLI did close 78.6% retracement of the fibonacci which was 1663.5. If FKLI opens with a gap up tomorrow, we may be looking for resistance 1678 to be re-tested again. And as earlier mentioned, today's candle showed a small hammer head pattern with a long tail which may show that bulls are still supporting the fall and may continue to push up. 

As i have mentioned in previous post, i am still pretty much bearish and hence, I would say that to short at resistances or short at strength. If FKLI manages to close above 1678 for the day, then we shall see 1690-1700 to be retested again despite the so called "elections" which are coming. If to trade at the bulls side, i would say, keep it intraday as much as possible. Bears, if you're not confident for the next day movement, do intraday too but if positions are taken near big resistances, i believe it should still be fine to hold but do have a stop loss no matter what.