Keep to long positions as the rebound is playing out. Yesterday, the FKLI formed a white candle and ended the session 22 pts higher, at 1,706 pts. It trended up throughout the session from a low of 1,681 pts to a high of 1,708 pts. The relatively strong rebound suggests that the corrective rebound that we have been anticipating continues to pan out. As there is no sign of a price reversal, we still expect the rebound to continue. Towards the downside, a firm breach of the immediate support of 1,655 pts may suggest that the FKLI’s multi-month retracement will resume. Until that happens, we maintain our near-term positive trading bias.

As the rebound continues to play out and as long as the recent low of 1,655 pts is not violated, we continue to recommend that traders stay in long positions, initiated at 29 Jun’s close of 1,688.5 pts. For risk management purposes, a stop-loss can be set at 1,655 pts.

The immediate support is expected at 1,655 pts, the low of 28 Jun. This is followed by 1,600 pts. On the flip side, the immediate resistance is at 1,735 pts, the low of 4 Jun. This is followed by 1,800 pts, near the high of 7 Jun.

Source: RHB Securities Research - 13 Jul 2018