Maintain long positions, as the bulls re-attempt to break the resistance. The FKLI performed positively in the latest session - it formed a white candle and retested the resistance levels of 1,800 pts and the 200-day SMA line. The session’s low and high were recorded at 1,788 pts and 1,799 pts, before ending at 1,797 pts, implying a gain of 6 pts. Given the bulls still show signs of control with the latest attempt to break the said resistance levels, we view the index’s overall upward move as firmly in place. For now, the risk for this positive bias would only be invalidated if the immediate support is breached. Until this happens, we keep to our positive near-term trading bias.

With the index is still showing a positive bias, and provided the said immediate support continues to hold, 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.

Towards the downside, the immediate support is set at 1,766.50 pts, 31 Jul’s low. This is followed by 1,740 pts, the low of 20 Jul. Towards the upside, 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 - 27 Sept 2018