Maintain long positions to ride on rebound. The FKLI ended the latest session on a positive note. Intraday, it trended higher from the low of 1,666 pts to a high of 1,676 pts, before ending at 1,674 pts – indicating a gain of 11.5 pts. The positive session is a follow-up from the prior session’s gain – which saw the index recapture the previous immediate resistance of 1,655 pts. Overall, the index’s rebound is seen as still in the early stages, and may extend further. Based on the current technical landscape, we are expecting the index to test the downtrend line (as drawn in the chart). Hence, we are keeping our positive trading bias.

As such, we continue to suggest that traders keep to long positions, which we initiated at 1,662.5 pts – the closing level of 12 Dec. For risk management purposes, a stop loss can be placed at below 1,648.5 pts.

The immediate support is pegged at 1,648.5 pts, the low of 11 Nov. The second support is expected at the 1,600-pt mark, a round figure. On the other hand, the immediate resistance is expected at 1,729 pts, the high of 8 Nov. The second resistance is set at 1,749.5 pts, the high of 17 Oct.

Source: RHB Securities Research - 14 Dec 2018