FKLI: Closes Higher

Maintain long positions. The FKLI’s buying interest has continued as expected. Another positive candle was formed yesterday, pointing to a continuation of the upside move. It rose 8 pts to close at the high of 1,668 pts, off the session’s low of 1,658.50 pts. Technically speaking, the bullish sentiment remains unchanged as long as the index does not cover the upside gap of 15 Feb. Given that the FKLI marked a higher close yesterday, we believe the rebound that started from 12 Feb’s white candle may persist. Overall, we remain bullish in the index’s short-term outlook.

Based on the daily chart, the immediate support level is maintained at 1,638.50 pts, ie the upside gap support of 15 Feb.The next support will likely be at 1,591.50 pts, obtained from the previous low of 21 Jan. To the upside, we are eyeing the immediate resistance level at 1,670 pts, near the midpoint of 4 Jan’s long black candle. Meanwhile, the next resistance is anticipated at 1,712.50 pts, ie the previous high of 30 Dec 2015.

Hence, we advise traders to stay long, following our recommendation of initiating long above the 1,622-pt level on 26 Jan. A trailing-stop can be set below the 1,638.50-pt mark in order to secure part of the gains.

FCPO: Sentiment Remains Bullish

Positive sentiment remains unchanged; stay long. The FCPO formed a positive candle with a long lower shadow yesterday, signalling that sellers have failed to reverse the positive sentiment. During the intraday session, it plunged to a low of MYR2,572 before pushing up to MYR2,613 at the end of the day. This is a sign that the upside strength is not over yet. From a technical perspective, at yesterday’s close, the commodity managed to recover above the MYR2,600 threshold after paring losses from an intraday low of MYR2,572. This indicates that the outlook is still positive. Overall, we keep our bullish view on the FCPO’s short-term outlook.

According to the daily chart, we are eyeing the immediate support level at MYR2,550, ie the low of 11 Feb. If this level is out, the next support is maintained at MYR2,508, near 31 Dec 2015’s high and 3 Feb’s low. To the upside, the immediate resistance level is anticipated at MYR2,648, which was the high of 15 Feb. Meanwhile, the next resistance is seen at the MYR2,700 psychological mark.

Therefore, we advise traders to stay long, since we originally recommended initiating long above the MYR2,485 level on 3Feb. A trailing-stop can be set below the MYR2,550 mark in order to secure part of the gains.

Source: RHB Research - 18 Feb 2016