Maintain long positions, as no price reversal signals were spotted. The FKLI softened marginally by 2 pts to close at 1,791 pts yesterday, after trading in the 1,787-1,797 pt range. Overall, it is extending its consolidation phase around both 1,800 pts and the 200-day SMA line. At the moment, we have not seen any price rejection signals from both of these levels – which, if it happens, may point to a deeper retracement. Based on this, we are keeping our near-term positive trading bias.

For now, provided the immediate support of 1,766.5 pts is not invalidated, the index may still be able to scale higher. As such, we continue to suggest that traders remain in 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 – also the closing level of 27 Aug.

Immediate support is pegged at 1,766.50 pts, 31 Jul’s low. The second support is at 1,740 pts, the low of 20 Jul. Moving up, immediate resistance is 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 - 26 Sept 2018