Bulls are pushing up; maintain long positions. The FKLI was trading in the range of 1,701 pts and 1,713 pts in the latest session, before it ended 6 pts higher at 1,711.5 pts. The positive session can be seen as the continuation of the index’s rebound phase, which started from the low of the “Piercing Line” formation that appeared on 25 Oct. For now, as long as the low of the said formation does not breach the downside, the bias for the index to extend its rebound would still be valid. Towards the upside, we are expecting the index to, at the very least, test the immediate resistance of 1,749.5 pts. Hence, we maintain our positive trading bias.

As the rebound is still showing signs of extending with the bias to test the said immediate resistance, we continue to recommend that traders stay in long positions – which we initiated at 1,718 pts or 2 Nov’s closing level. For risk management purposes, a stop-loss can be placed at 1,655 pts.

Towards the downside, the immediate support is maintained at the 1,655-pt level, the low of 28 June. The following support is at the 1,600-pt mark. On the other hand, the immediate resistance is now expected at 1,749.5 pts, or the high of 17 Oct. This is followed by 1,779 pts, the high of 10 Oct.

Source: RHB Securities Research - 21 Nov 2018