Bulls are pushing ahead, maintain long positions. The FKLI has managed to reverse its earlier session’s weakness, closing the session above the previous 1,646-pt immediate resistance. The session’s low and high were recorded at 1,638 pts and 1,650.5 pts, before ending at 1,649.5 pts – this indicated a 4-pt gain. The positive session signalled the counter-trend rebound that started 14 May’s “Piercing Line” formation’s low of 1,573 pts is still extending beyond the 50- day SMA line. As the rebound has yet to flash out an overbought Daily RSI reading – and in the absence of price reversal signals from the resistance levels – we stick to our positive trading bias.

As the bulls are still in control over the rebound, we continue to recommend that traders remain in long positions, which were initiated at 1,619.5 pts. A stop-loss can now be placed at the breakeven level.

Towards the downside, immediate support is now pegged at 1,613 pts, which was the high of 13 May. This is followed by 1,573 pts, or the low of 14 May. Meanwhile, the immediate resistance is now eyed at 1,656.5 pts, ie the high of 26 Mar. This is followed by 1,694.5 pts, which was the high of 19 Mar.

Source: RHB Securities Research - 4 Jun 2019