Maintain long positions as there is no negative follow-up. The FKLI swung between a low and high of 1,594.5 pts and 1,599.5 pts, before closing 2 pts higher at 1,595.5 pts. The positive session meant that there was no negative follow-up from the prior session’s sharp decline. By extension, there is no price confirmation to signal the index’s countertrend rebound that started from the low of 1,547.5 pts on 10 Oct has completed. We are holding to the view that this countertrend rebound is meant to correct the index’s previous retracement leg between July and October. All in, we are keeping our positive trading inclination.

As the bulls are still able to defend the rebound, 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 be set at the breakeven point.

We are keeping the immediate support at 1,564.5 pts, which was the low of 21 Oct, followed by 1,547.5 pts, the low of 10 Oct. Towards the upside, the immediate resistance is still pegged 1,621.5 pts, the high of 9 Aug. This is followed by 1,635 pts, near the 200-day SMA line

Source: RHB Securities Research - 15 Nov 2019