FKLI: Maintain Long Positions

Stay long, with a trailing-stop set below the 1,623-pt support. The FKLI ended higher to form a positive candle last Friday. It gained 8.50 pts to close at 1,638 pts, off its low of 1,624 pts and high of 1,638.50 pts. Technically speaking, the index recouped the previous day’s losses and marked a higher close above the 1,623-pt support mentioned previously, indicating that the positive sentiment is unchanged. We view last Friday’s candle as a continuation of the rebound that started off 22 Jan’s white candle. Overall, we remain positive in our short-term outlook.

According to the daily chart, we are eyeing the immediate support level at 1,623 pts, situated near the lows of 28 Jan and 3 Feb. If this level is taken out, look to 1,591.50 pts – ie the previous low of 21 Jan – as the next support. To the upside, the immediate resistance level is seen at 1,670 pts, set near the midpoint of 4 Jan’s long black candle. Meanwhile, the next resistance is anticipated at 1,712.50 pts, which was the previous high of 30 Dec 2015.

Hence, we advise traders to maintain long positions, following our recommendation of initiating long above the 1,622-pt level on 26 Jan. A trailing-stop can be set below the 1,623-pt threshold in order to minimise the downside risk.

FCPO: Inching Upwards

Stay long, with a new trailing-stop set below the MYR2,550 level. The upside strength of the FCPO continued as expected as a white candle and an upside gap were formed last Friday. It rose MYR45 to settle at MYR2,639, after oscillating between a high of MYR2,642 and low of MYR2,611. As the FCPO has successfully taken out the MYR2,600 and MYR2,630 resistance levels mentioned previously, this can be viewed as the bulls extending their buying momentum. In view of the fact that the market registered its highest close in more than 21 months, coupled with the rising 21-day MAV line, these indicates that the upside swing that started off 2 Feb’s long white candle may be continuing.

Currently, the immediate support level is anticipated at MYR2,550, ie the low of 11 Feb. If this level is taken out, look to the MYR2,508 – situated near 31 Dec 2015’s high and 3 Feb’s low – as the next support. To the upside, we are eyeing the immediate resistance level at the MYR2,700 psychological spot, also near 17 Apr 2014’s high. The next resistance will likely be at MYR2,786, which was the previous high of 19 Mar 2014.

Recall that on 3 Feb, we initially recommended traders to initiate long positions above the MYR2,485 level. We continue to suggest them to stay long for now, while setting a new trailing-stop below the MYR2,550 threshold, in order to lock in part of the profits.

Source: RHB Research - 15 Feb 2016