Maintain long positions as the rebound is still showing progress. The FKLI settled the latest session higher by 4.5 pts at 1,576.5 pts. Trading took place between 1,574 pts and 1,579.5 pts. The positive performance is signalling that the index’s countertrend rebound continues to develop. The rebound recently resumed after the index retested the immediate support of 1,547.5 pts. The latest session also witnessed the bulls testing the 50-day SMA line – a firm breakaway in the coming session would be a positive signal. Maintain our positive trading bias.

As price signals are still indicating a good possibility for the rebound to extend, we recommend that traders remain in long positions. We initiated these at 1,568 pts, the closing level of 6 Dec. To manage risks, a stop-loss can be placed below 1,547.5 pts.

We are keeping the immediate support at 1,547.5 pts, the low of 10 Oct, followed by the 1,500-pt level. Towards the upside, the immediate resistance is set at 1,588.5 pts, the high of 29 Nov. This is followed by 1,621.5 pts, the high of 9 Aug.

Source: RHB Securities Research - 16 Dec 2019