Our long call remains valid as opportunities lean more towards buyers. Yesterday was a bullish session for the FKLI, as it ended at 1,793.50 pts, posting a 7.50 pts gain. The index formed a white candle after oscillating between a low of 1,788 pts and high of 1,796 pts. Presently, we believe that the current bullish bias is still exerting itself. We also highlight that the 14-day RSI indicator has returned above the 50-pt neutral level at 51.63 pts – an indication that market sentiment has improved. This enhances our positive view.

Based on the daily chart above, we think that the opportunities are still leaning more towards the buyers. Technically speaking, it is best that traders maintain their long positions. For risk-minimisation purposes, we advise setting a stop-loss below the 1,766.50-pt mark. This is in line with our long recommendation 1,812 pts, also the closing level of 27 Aug.

The 1,766.50-pt mark, ie 31 Jul’s low, is maintained as our immediate support. The following support is found at 1,740 pts, obtained from the low of 20 Jul. Towards the upside, we keep the immediate resistance at 1,810.5 pts, which are the highs of 9 and 10 Aug. In the event that this level is taken out, our next resistance is seen at 1,828 pts, located at the high of 29 Aug.

Source: RHB Securities Research - 7 Sept 2018