No sign of price exhaustion; maintain long positions. The FKLI swung between a low and high of 1,601 pts and 1,607 pts, before closing marginally better by 0.5-pt at 1,605 pts. The latest session’s performance suggests that the bulls are still in control over the index’s countertrend rebound phase, which started from the low of 1,547.5 pts on 21 Oct. The RSI reading is indicating the said rebound has yet to reach an overstretched level – implying that there is room for a possible further upside. In the absence of negative price actions signalling possible price exhaustion, we are keeping our positive trading bias.

As there is no price rejection signal from the immediate resistance of 1,610 pts, traders are recommended 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 be set at the breakeven point.

The immediate support is set at 1,564.5 pts, the low of 21 Oct. This is followed by 1,547.5 pts, the low of 10 Oct. Moving up, 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