Maintain long positions, as we are not seeing any sign of a price exhaustion. The FKLI formed a black candle to settle 7 pts weaker at 1,590.5 pts yesterday, after oscillating between a low and high of 1,586.5 pts and 1,595 pts. While the index recorded its lowest close in three weeks, we still regard the negative session as a part of the multiweek consolidation phase. This consolidation is taking place below the 1,621.5-pt resistance point, and set in to correct the previous upward move that occurred between early October and early November. As we are not seeing the peak of the countertrend increase yet, we maintain our positive trading bias.

Premised on this, 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.

Immediate support is pegged at 1,564.5 pts, the low of 21 Oct, followed by 1,547.5 pts, the low of 10 Oct. Moving up, the immediate resistance is still at 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 - 22 Nov 2019