Bulls are still in charge, maintain long positions. The FKLI ceased the latest session on a positive note – settling above the 1,600-pt level. For the intraday session, the index generally trended higher, with the low and high recorded at 1,594.5 pts and 1,605 pts before ending 7.5 pts better at 1,603.5 pts. Overall, the FKLI’s countertrend rebound that started from the low of 1,547.5 pts on 10 Oct is still in the process of developing. This positive could be further enhanced should the 1,621.5-pt immediate resistance be cracked. On the observation that the bulls are still in firm control, we keep to our positive trading bias.

On the expectation that the countertrend rebound could still be extending, traders are advised to remain in long positions. We initiated these at 1,565 pts, or the closing level of 14 Oct. To manage risks, a stop-loss can be set at the breakeven point.

The immediate support is pegged at 1,564.5 pts, which was the low of 21 Oct. This is followed by 1,547.5 pts, or the low of 10 Oct. On the other hand, the immediate resistance is still pegged at 1,621.5 pts, which was the high of 9 Aug. This is followed by 1,635 pts, ie near the 200-day SMA line.

Source: RHB Securities Research - 19 Nov 2019