No change to the positive bias; maintain long positions. Yesterday, the FKLI ended slightly higher despite the earlier weakness – suggesting that the bulls were in control. The session’s low and high were recorded at 1,750 pts and 1,762.5 pts respectively, before it closed at 1,761.5 pts – signifying a 4.5-pt gain. The index’s latest four sessions’ movements are seen as consolidation phase below the 200-day SMA line, and its rebound since the low of the “Bullish Harami” on 31 May should not be at risk as long as the 1,735 pts support is not breached. On these factors, we keep our positive trading bias for the near term.

We continue to advise traders to keep to their long positions, which we initiated at 1,777 pts, the closing level of 6 Jun. To manage risks, investors can set the stop-loss at 1,735 pts.

The immediate support is expected to emerge at 1,735 pts, the low of 4 Jun. Breaking this may lead to the market testing the 1,700-pt mark. Towards the upside, the immediate resistance is now at 1,816.5 pts, or the high of 24 May. The following resistance is set at 1,876.5 pts, the high of 14 May.

Source: RHB Securities Research - 14 Jun 2018