Kuala Lumpur Stock Index Futures Outlook : Forecast for 29th June 2007 !

Kuala Lumpur Stock index futures: Stop out/SA

June futures closed lower by 6.0 point at 1347.5 on relatively low volume of 8,992 lots.

1. We continue to stay out as price closed within the Bollinger bands.

2. But if FKLI can close below 1348 today we would turn short.

3. Otherwise, any close above 1348 could be a “buy”.

4. We know that July is already below 1348. July closed at 1339.

5. But it is possible for July to rise to cover the down-gap and close above 1348 today.

6. If you are a contrarian, you would be buying July at the open and place sell-stop at 1334 OL but do not short yet.

General commentary: The Dow rebounded by 90 points and the ringgit was up by 160 pips but FKLI did not rebound in tandem. What a disappointment. Let us see if we are just as anemic today. If FKLI closes below 1344.0 OL (June contract), then cut loss on longs. If you are trading July contract, the stop loss would be 1334.5 OL.

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 15.61 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.


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Kuala Lumpur : Crude Palm Oil Futures

Kuala Lumpur crude palm oil futures: Maintain long/Sell-stop @ 2424 OL/F.B. @ 2501/T.P. @ 2560
SEPT CPO futures closed higher by RM32 at 2457 on relatively high volume of 11,525 lots.

1. We were again correct in calling for a buy and a “gap” to make up for the change of contract
month.

2. We are maintaining long but place sell-stop at 2424 OL to exit longs. If you want a tighter
stop, then use yesterday’s low, i.e. @ 2444 OL to exit longs.

3. If CPO breaches 2500, then “further buy” @ 2501 OH.

4. Next target is still at 2560.

General commentary: We were right about our “F. Tam white inside out up” pattern, which resulted in a higher close, up by RM32. Today CPO may consolidate or may rally to test 2560. We doubt it will stage a sharp pullback. But in case it does, our sell-stops are either at 2444 OL or 2424 OL.

Next upside targets: 2560/2749 (hit)/3313 (targets revised on June 5)

Downside support: 2466(hit)/2393(hit)/2307/2223/2153

Ichimoku chart: (Based on kumo (clouds), CPO is long. Kumo support is at 2111. Ichimoku chart will turn short @ 2110 OL (updated on June 11, 2007)

Average True Range for CPO: A.T.R. is 112.36 for CPO. 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.

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