Further upside is possible; maintain long positions. The FKLI oscillated between a low and high of 1,591 pts and 1,596 pts last Friday, before closing slightly higher by 1 pt at 1,592 pts. It crossed above the previous resistance zone of 1,573-1,585 pts in the previous session – which implies that the bulls are still in firm control. The RSI reading has not reached an overbought level, so the potential for the upside to be extended is still there. As we still believe the countertrend rebound that started from the low of 1,547.5 pts on 10 Oct has room to grow, we maintain our positive trading bias.

As the bulls are still on a firm rebound and possibility for a rebound extension is high, traders are advised to remain in long positions. We initiated these at 1,565 pts, the closing level of 14 Oct. To manage risks, a stop-loss can now be set at the breakeven level.

The immediate support is expected to emerge at 1,547.5 pts, the low of 10 Oct, followed by 1,500 pts. Towards the upside, the immediate resistance is set at 1,600 pts, followed by 1,610 pts, the high of 30 Aug.

Source: RHB Securities Research - 4 Nov 2019