Maintain long positions as it continues to look like a minor consolidation near the immediate resistance. The FKLI ended the latest session 9 pts lower at 1,716.5 pts. The low and high were registered at 1,715.5 pts and 1,724 pts. Still, from the daily chart, there are no signals to suggest that the index is experiencing a price reversal from the immediate resistance of 1,729 pts. Instead, price actions over the recent sessions indicate that a minor consolidation phase is developing. This consolidation phase is deemed healthy to correct the index’s relatively sharp rebound from the 50-day SMA line recently. Hence, we keep to our positive trading bias.

As the recent price actions have not produced any technical evidence that the index’s rebound has reached its limit – we continue to recommend that traders maintain long positions. We initiated these at 1,707.5 pts, the closing level of 19 Feb. To manage risks, the trailing-stop is set at the breakeven level.

The immediate support is kept at 1,664 pts, the low of 2 Jan. This is followed by 1,631.5 pts, the low of 18 Dec 2018. Meanwhile, the overhead resistance is expected 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 - 27 Feb 2019