Still looks like a minor consolidation; maintain long positions. The FKLI’s latest performance was seen as positive. Trading kicked-off in negative territory with the session’s low recorded at 1,746.5 pts in the early session, before rebounding to a high of 1,765.5 pts. The closing level was recorded at 1,760.5 pts, or a marginal gain of 1.5 pts. We continue to maintain our bias that the movement of the index’s latest three sessions’ resembles the characteristics of a minor consolidation – which set in after the recent upward move. Additionally, we have yet to see signs of consolidation, in the form of deeper retracement, developing. Hence, the bias for the index to extend its rebound once this minor consolidation phase is completed, remains valid. We maintain our near-term positive trading bias. As the bias for the index to extend its rebound is still valid and not showing early signs of reversing, we continue to recommend that traders stay in long positions, initiated at 29 Jun’s close of 1,688.5 pts. To manage risks, a trailingstop can be at set at 1,740 pts. The immediate support is expected to emerge at 1,735 pts, the low of 4 Jun. The second support is at 1,655 pts, the low of 28 Jun. On the flip side, the immediate resistance is now pegged to 1,800 pts, near the high of 7 Jun. This is followed by 1,844.5 pts, the high of 23 May.

Source: RHB Securities Research - 24 Jul 2018