Maintain long positions as the bulls are still retaining control near the resistance zone. The FKLI ended slightly lower by 0.5 pts to settle at 1,674 pts – after it swung between a low and high of 1,673 pts and 1,679.5 pts. Price actions in recent sessions continue to indicate that the index is likely developing a relatively narrow sideways consolidation phase below its overhead resistance zone. The resistance zone is made up of the downtrend line (as drawn in the chart) that stretches from Apr 2018’s high and the 1,700-pt threshold, a level that is located slightly above the 200-day SMA line. As such, we maintain our positive trading bias.

As the index continues to show a healthy consolidation below 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.

Immediate support is eyed at 1,633.5 pts, the low of 17 Jun. This is followed by 1,613 pts, the high of 13 May. Moving up, immediate resistance is pegged 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 - 28 Jun 2019