Malaysia Future Market Review 080909

Index futures opened relatively unchanged and traded in a tight range of 6 index points in the morning sessions. However, cash led strength in the afternoon session prompted a short squeeze that has helped to propel September contract to a new high for this year at 1193.5. Yet, futures volumes remain fairly low by historic standards as most traders remained on the sidelines and appeared ambivalent on the market's immediate direction, particularly with Wall Street closed for Labour Day. Hence, there was neither heavy buying nor selling activity. Elsewhere, Pacific markets extended its upward thrust on increased optimism about the prospects of recovery in US economy and positive feelers from the G-20 meeting over the weekend. At close, KL index futures churned out another 1% gain to settle at 1192.5, up 10.5 points.

Technically, most indicators are positive and index futures looks likely to scale new high in immediate term on follow-through buying momentum. Immediate upside hurdle is targeted psychological 1200 level. With the underlying tone of the market remaining overwhelming firm, a pullback may be shallow and brief near 1184 index points.