Maintain long positions as bulls defend immediate support. Yesterday, the FKLI formed a white candle and ended the session 19.5 pts higher at 1,786.5 pts. The intraday movement was encouraging, as the index trended higher from an intraday low of 1,767.5 pts in the early session to a high of 1,787 pts. The relatively strong session came after the immediate support of 1,766.5 pts was tested in the prior session. Consequently, a “Bullish Harami” formation was also appeared. This implies the overall bias for the index to extend its rebound is still firmly intact – even though the index is still capped by the 200-day SMA line. On this observation, we hold on to our near-tem positive trading bias.

Provided the said immediate support – which has become technically critical after it was tested in the prior session – is not broken, we continue to advise traders to maintain their long positions. For risk management purposes, a stop-loss can be set below the 1,766.50-pt mark, in line with our long recommendation of 1,812 pts – which is also the closing level of 27 Aug.

The immediate support is set at 1,766.50 pts, ie 31 Jul’s low. The following support is expected at 1,740 pts, the low of 20 Jul. On the upside, the immediate resistance is maintained at 1,810.5 pts, the highs of 9 and 10 Aug. This is followed by 1,828 pts, the high of 29 Aug.

Source: RHB Securities Research - 14 Sept 2018