Maintain long positions. Last Friday saw the FKLI performed positively, as it rebounded from the negative territory in the first half of the session to close 4.5 pts higher at 1,769.5 pts. Intraday, the session low and high were posted at 1,759.5 pts and 1,771 pts. The positive session indicates that the rebound, which has been in development since the low of 1,655 pts on 28 Jun, is still extending and not showing signs of losing momentum. The rebound so far is still healthy, as the daily RSI reading of 65.7 is still below the overbought threshold. Hence, we maintain our nearterm positive trading bias.

With the bulls still clearly in control over the index’s direction and no signs of reversal are spotted on the daily chart, 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.

The immediate support may be found at 1,735 pts, the low of 4 Jun. The second support is set at 1,655 pts, the low of 28 Jun. Towards the upside, 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 - 30 Jul 2018