Marginally above the previous immediate resistance; maintain long positions. The FKLI ended the latest session with a 4-pt gain at 1,576 pts – slightly above the previous immediate resistance of 1,573 pts. The low and high were posted at 1,571 pts and 1,577.5 pts. The positive performance is an encouraging sign that the countertrend rebound, which started from the recent low of 1,547.5 pts, still has room to extend. Even more significant is that the bulls are showing resiliency despite trading in the important resistance zone that comprised the said previous immediate resistance and 1,585 pts (located near the lower bound of the sideways move that developed between mid-August and early-October). Maintain our positive trading bias.

With the index is showing strength in face of the said resistance zone, we continue to recommend that traders stay in long positions. We initiated these at 1,565 pts, which was the closing level of 14 Oct. For risk management purposes, a stop-loss can be set below 1,547.5 pts.

The immediate support is set at 1,547.5 pts, which was the low of 10 Oct, followed by 1,500 pts. Meanwhile, we revise the immediate resistance target to 1,585 pts, a level near the lower bound of the sideways move which developed between mid-August and early-October. This is followed by 1,600-pt mark, a round figure.

Source: RHB Securities Research - 18 Oct 2019