Well, the title of this post came from the movie "The Devil's Advocate" where "the devil" told Kevin Lomax (Keanu Reeves) in the toilet on his winning streak that it will break soon. Seems the same way, more for FCPO than FKLI. With the Ringgit firming up, weaker soy bean activity and the very very marginal increase in Feb 1-.25 export data, FCPO is likely to continue south-wards for probably this entire week. Nevertheless, on the overall trend, it's still a a very nice bullish movement. FKLI on the other hand seems to be moving upwards with slight knee jerks movements. Regional markets took a slight retracement yesterday except for Nikkei which went positive by 213 points. Hence, it would more likely be a sideways but upward bias for FKLI
Let's take a look at the charts for the technical analysis part:
FCPO
As mentioned, ringgit firming, very very marginal increase in export data, weaker soy bean activity yesterday. MACD-H is tracking lower and shortening its bars indicating that prices are slowly correcting while MACD lines are flattening and looks likely to curve down. Stochastics had already crossed down with a substantial number of volume and higher open interest which indicates support for the retracement. Candlestick patterns showed lower prices since Monday and yday with a "graveyard doji" like candlestick, shows that prices could follow down further today. Nevertheless, prices had been going on smoothly upwards on the trend line and the bullish trendline is strongly in-tact.
FKLI
Like FCPO, FKLI's bullish trendline is still strongly in tact. and with higher lows showing from the past 2 weeks, shows that prices have a strong movement upwards. However, there will be short knee jerks where prices will slump lower but that's a good opportunity to buy and hold. Prices are above all EMA's (12,22,32) and is poised to pick up more steam. Yesterday and today shows more volume on a higher price but both of these days but with doji candle patterns which could indicate that traders are waiting for a confirmation, probably in regional market news. Stochastics have retraced and seems to continue upwards and cross back up. MACD lines have crossed up and moved back into the positive region while MACD-H shows a higher bar supporting the bulls.
Personal View
FCPO: For this few days, take shorts on strength. Watch supports at 2700 and 2690 as it could probably retrace to these levels before continuing the bull.
FKLI: Buy on any weaknesses and hold. Follow buys at 12 and 22 EMA.
