Still resembling a consolidation near the resistance zone; maintain long positions. The FKLI traded in a relatively narrow band of 1,672.5 pts and 1,677 pts. At the closing, it eased 3 pts to close at 1,674.5 pts. Broadly, the rebound that started from 14 May’s “Piercing Line” formation is still valid. The price actions of recent sessions still exhibit characteristics of a narrow consolidation. This consolidation phase is taking place near the resistance zone that consists of the downtrend line (as drawn in the chart) and the 1,700-pt mark, a level slightly above the 200-day SMA line. We maintain our positive trading bias.

As the bulls are still able to retain control near the said resistance zone, we continue to recommend traders to stay in long positions – which we initiated at 1,619.5 pts. A stop-loss can now be placed below 1,651 pts, the high of 18 Jun.

We still expect the immediate support to emerge at 1,633.5 pts, the low of 17 Jun. This is followed by 1,613 pts, the high of 13 May. On the other hand, immediate resistance is set at 1,700 pts, being the next round figure. This is followed by 1,730, near the high of 21 Feb.

Source: RHB Securities Research - 27 Jun 2019