Maintain long positions, as there could still be more upside potential. The FKLI tested the 1,610-pt immediate resistance yesterday, after oscillating between a low and high of 1,598 pts and 1,610 pts. It closed flat, at 1,604.5 pts. Yesterday’s session suggests that the countertrend rebound, which started from the low of 1,547.5 pts on 21 Oct, is still sturdy – since there has been no price rejection signal from the immediate resistance. The RSI reading also indicates that the rebound has yet to reach an overbought condition. As such, we make no change to our positive trading bias. As bulls remain in control of the market, traders should remain in long positions. We initiated these at 1,565 pts, the closing level of 14 Oct. To manage risks, a stop-loss can be set at the breakeven point. Towards the downside, immediate support is pegged at 1,564.5 pts, the low of 21 Oct. This is followed by 1,547.5 pts, the low of 10 Oct. On the other hand, the immediate resistance is at 1,610 pts, the high of 30 Aug, followed by 1,621.5 pts, the high of 9 Aug.

Source: RHB Securities Research - 6 Nov 2019