Kuala Lumpur Stock Index Futures For Today, 21 June 2007 !

Kuala Lumpur Stock index futures: Maintain long/Sell stop at 1374.0 OL

June futures closed higher by 14.0 point at 1392.00 on relatively low volume of 4,708 lots.


1. FKLI rose strongly yesterday, to the surprise of the shorts. We were right that the market was going to catch the shorts.

2. Partial short covering pushed the FKLI to close 14 points higher, at 1392.

3. Today we may start with a pullback but if the Dow closed higher, we can expect a higher opening and another gap-up. We expect more short covering on the way up.

4. We are maintaining longs but place sell-stop at 1374 OL.

5. Upside Wave 5 target is 1466. After that we look for a toppish Japanese candlestick pattern before shorting.

General commentary: Finally, we have an upside breakout of a consolidation, exactly as we had anticipated. This consolidation started at least from April 5 and is therefore a 2-month consolidation. As such, now that it is seen breaking out - you can expect a powerful rally. Shorts beware! Expect FKLI to hit 1466.

Upside Fibonacci target 1466(Revised on June 15)

Downside targets: 1294/1257/1212

Ichimoku chart: (Based on Kumo (clouds) FKLI is still long. Kumo support is at 1206. Ichimoku chart will turn short at 1205 OL) (Updated on June 11, 2007).

Average True Range for KLFE: A.T.R. is 18.11 points for FKLI futures. This implies you need to put a stop above/below this A.T.R. or you can get stopped out due to the volatility factor. We advocate a 1.5 x or 2 x the ATR. We are using a 5 days ATR.

By: Fred Tam

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Fred Tam is the owner of www.fredtam.com and www.picapital.com.my F1 Trader Online - Know when to enter & exit the markets.