Rebound could still be extending; maintain long positions. Yesterday, the FKLI closed 4 pts higher at 1,562 pts, after registering a low and high of 1,557.5 pts and 1,567.5 pts. We still believe the index is in the process of developing a multi-month countertrend rebound phase. This rebound, which started from the low of 1,547.5 pts on 10 Oct, recently resumed after retesting the low point. Towards the upside, we expect it to test the 50-day SMA line. As such, we keep to our positive trading bias.

As the index could still be scaling higher, 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.

The immediate support is set at 1,547.5 pts, the low of 10 Oct, followed by the 1,500-pt level. Moving up, 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 - 11 Dec 2019