Still looks like a minor consolidation; retain long positions. The FKLI closed 1.5 pts higher at 1,675.5 pts, after it ranged between 1,672 pts and 1,677.5 pts. The technical picture over the past week or so continues to indicate the index is undergoing a minor consolidation phase, below its overhead resistance area – consisting of the downtrend line (as drawn in the chart), and the 1,700-pt level. This consolidation phase is considered as healthy as it meant to correct the index’s previous multi-week’s upward move. All in, the counter-trend rebound that started from the 14 May’s “Piercing Line” formation is still showing good signs of strength. Maintain our positive trading bias.

In the absence of price reversal signals from the said resistance area, 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.

Towards the downside, the immediate support is pegged 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, the immediate resistance is expected 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 - 1 Jul 2019