FKLI: Upside Move Continues

Stay long with a new trailing-stop set below the 1,638.50-pt level. The FKLI formed a white candle yesterday. It rose to a high of 1,664.50 pts during the intraday session, before ending at 1,660 pts for the day. From a technical perspective, we believe buyers are retaining control of the market, as the bullishness of the upside gap of 15 Feb was not negated. As the index has marked a higher close vis-à-vis the previous sessions since 12 Feb, this indicates that the near-term upside move may persist. Overall, we keep our positive view on the FKLI’s near-term outlook.

Based on the current outlook, we are now eyeing the immediate support level at 1,638.50 pts, situated at the upside gap support of 15 Feb. If this level is taken out, the crucial support is maintained at the previous low of 21 Jan, at 1,591.50 pts. To the upside, the immediate resistance level is seen at 1,670 pts, near the midpoint of 4 Jan’s long black candle. The next resistance will likely be at 1,712.50 pts, which was the previous high of 30 Dec 2015.

Recall that we initially recommended traders to initiate long positions above the 1,622-pt level on 26 Jan. We continue to advise them to stay long, while setting a new trailing-stop below the 1,638.50-pt threshold in order to lock in part of the profits.

FCPO: Taking a Breather

Stay long provided that the MYR2,550 support is not violated at the closing. The FCPO ended on another black candle yesterday. It slipped MYR11 to settle at MYR2,588, off the session’s high of MYR2,627 and low of MYR2,578. Based on the current technical landscape, we believe that the buying interest may persist in the near term, as the commodity has failed to erase the gains from 11-12 Feb’s white candles. The black candles of 15-16 Feb can be viewed as a result of profit-taking activities following the recent gains. In view of the positive slope of the 21-day MAV line, we think the positive sentiment should stay intact.

On a technical basis, the immediate support level is anticipated at MYR2,550, ie the low of 11 Feb. If a breakdown arises, look to MYR2,508 – near 31 Dec 2015’s high and 3 Feb’s low – as the next support. On the other hand, the immediate resistance level is seen at MYR2,648, ie the high of 15 Feb. The next resistance will likely be at the MYR2,700 psychological spot.

Hence, we advise traders to maintain long positions, following our recommendation of initiating long above the MYR2,485 level on 3 Feb. A trailing-stop can be set below the MYR2,550-pt threshold in order to lock in part of the profits.

Source: RHB Research - 17 Feb 2016