Alright here are the market summary for today.
KLCI Cash Index
Opened at 1590.00 from 1585.00 the previous day.
High 1596
Low 1588
Close 1596
FKLI April Contract
Opened 1582 from 1582.50 the previous day
High 1591.50
Low 1581.00
Close 1584.50
What a great day we had to an other wise choppy week. In my opinion, with no important economic data coming out tonight, traders are more willing to take position as shown by the price action of today compared with the days (Monday to Thursday) where data were being released daily. I expect the US market to be doing the same tonight with nice ranges to trade with but will also take note in mind of bounces and pull back as it is a Friday.
In the morning update, we expected today to be slightly choppy range trading and slightly upside biased day.
Our levels in the morning was as follows:
April Contract:
Upper Resistance: 1588 and 1591
Lower Support: 1580, 1578 and 1574
Today, the low traded for April contract was in fact 1581 which was very close to our 1st level of support of 1580.00. Then we traded to test our first level of resistance at 1588 and then to 1591. The high of the day was in fact 1591.50 so we were pretty close by 1 tick only. After touching 1591.5, we actually sold off sharply to 1583 level before closing at 1584.50.
The cash index in fact performed way better than we expected for the day, but in fact, closed at the high of the week's range which we have indicated in our weekly forecast in the beginning of this week which was the 1595 range.
So as you can see, we made some really good calls today of the direction of the market based on the direction and price action indicated by the overnight market namely the US market. Now here is the thing about co-relation. It doesn't always work 100% of the time because the market is a dynamic thing. We need to take whatever information that are relevant out there, then use that as a guide and apply those information into our local market. Also, things and conditions changes by the minute so as a prudent trader, you need to be aware of these changes and be ready to take your profit or exit the position if you are being caught in the wrong direction.
So we did a few things right today which are:
1) Identified the right support levels where we can take an expected long position and where to cut loss if we are wrong.
2) Identified the possible resistance where we can take our profit
3) Knowing that during Fridays, price action tend to be choppy as a lot of traders do not like to hold positions over the weekend due to the uncertainty and would likely lighten their position accordingly as indicated by the late pull back from the highs.
So overall, I think this was a good end to the week and we did in fact had an up week and we did in fact tested the high of the week of 1595 in the cash market as indicated in our weekly forecast in the begining of this week. You can recap and read about it here. :)
Alright, I will update the FCPO summary shortly..
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FCPO
Here are the summary for the FCPO contracts.
We traded to these levels today:
Open 3437 from previous day's close of 3456
High 3445
Low 3426
Close 3433
We expected that sellers would pile on the selling momentum today with buyers taking their profit in line with the other 4 grains futures that we are tracking namely Soybean Oil, Soybean, Wheat and Corn Futures we have indicated in our morning update. But in fact, there was actually opportunities for both the buyers and sellers today.
The market opened at 3437, which was around the area of our first level of support at 3436. We then traded briefly to a high of 3445 before the selling came in to push this down to 3426, which was above our second level of support of 3419. Now to be honest, I don't know if I would go long here.. but I suppose some traders would have taken the long trade here.. I would have preferred to wait for price to bounce back up and sell again after that.
Then we traded for a period of time in our first level of support area of 36-39 area before trying to break and push above. We manage to trade to 3444 on the second try but couldnt make a new high for the day. From there, seller came back in to pile on the selling after realizing the lack of conviction from buyers to push this to new high and we subsequently sold off to 26-27 area.
So.. looking forward to the week ahead. Stay tuned to the weekly update which we will talk about the possible weekly range on the KLCI, FCPO, Soybean Oil, Soybean, Wheat and Corn Futures and what are the contingencies if prices traded outside those ranges i.e reversal of the market.
Wishing everyone a great weekend ahead!
Trade safe and ciao!
Best Regards,
Tech Trader
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