Still resembling a consolidation near the immediate resistance; maintain long positions. The FKLI dipped 4 pts to close at 1,725.5 pts yesterday, with the low and high at 1,718.5 pts and 1,727 pts. The index’s latest three sessions’ price actions – near the immediate resistance of 1,719 pts – resemble the characteristics of a consolidation phase. This is deemed healthy for a correction of its recent rebound from the 50-day SMA line – which was relatively sharp. Overall, with no price reversal signals spotted near the immediate resistance, we keep to our positive trading bias.

As the consolidation is showing healthy signs of developing, we continue to recommend that traders stay in long positions – at 1,707.5 pts, the closing level of 19 Feb. To manage risks, the trailing-stop is revised to the breakeven level.

Immediate support is maintained at 1,664 pts, the low of 2 Jan. Breaking this may see the market challenge 1,631.5 pts, the low of 18 Dec 2018. Moving up, the immediate resistance is set at 1,729 pts, the high of 8 Nov. This is followed by 1,749.5 pts, the high of 17 Oct 2018.

Source: RHB Securities Research - 26 Feb 2019