Rebound is still in play; keep to long positions. The FKLI charted a positive trend yesterday, even though it closed marginally higher by 2 pts, at 1,765 pts. It also attempted to break away from the consolidation zone that have been in development over the latest few sessions, again. We believe it is still trading within the said consolidation zone, as it is still unable to end above 19 Jul’s high of 1,765 pts. The session’s low and high were recorded at 1,761 pts and 1,773 pts. The attempt to break from the 19 Jul high continues to suggest the rebound since the low of 1,655 pts is still going strong. Hence, we maintain our near-term positive trading bias.

With the rebound (developing since the low of 1,655 pts) still not showing clear signs of exhaustion, we continue to advise traders to keep to long positions, initiated at 29 Jun’s close of 1,688.5 pts. To manage risks, a trailing-stop can be set at 1,740 pts.

We keep the immediate support target at 1,735 pts, the low of 4 Jun. This is followed by 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 - 27 Jul 2018