Stay long. The buying momentum in the FKLI continued as expected. A white candle was formed yesterday, which pointed towards a continuation of the upside move. It climbed 12 pts to close at 1,572 pts, off the session’s low of 1,561 pts. Market sentiment remains positive, as the index has posted a white candle and hit its 1-week high. We view yesterday’s white candle as a continuation of the bullish reversal pattern of 3 Dec’s “Hammer” pattern. Overall, we keep our positive view on the FKLI’s outlook.

As seen in the chart, we anticipate the immediate support level at 1,547.50 pts, ie the previous low of 10 Oct. Meanwhile, the next support remains at the 1,500-pt psychological mark. On the other hand, the immediate resistance level is at 1,585 pts, the high of 29 Nov. If a breakout arises, the next resistance is situated at 1,621.50 pts, determined from the high of 9 Aug.

Therefore, we advise traders to stay long, following our recommendation of initiating long positions above the 1,568-pt level on 9 Dec. At the same time, a stop-loss can be set below the 1,547.50-pt threshold to limit the risk per trade.

Source: RHB Securities Research - 13 Dec 2019