Bulls are pausing below 50-day SMA line; maintain long positions. The FKLI ceased the latest session 4.5 pts lower at 1,572 pts. This was after it ranged between 1,567.5 pts and 1,578 pts. The negative session came after the index tested the 50-day SMA line in the previous session. Nevertheless, it was not sufficient to suggest a price rejection from the said SMA line. Overall, we are maintaining our view that the index is still in the process of developing a countertrend rebound. Towards the upside, a firm breach of the said SMA line would further enhance this positive trading bias.

We are not seeing the countertrend rebound reaching a top, 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.

Towards the downside, the immediate support is set at 1,547.5 pts, the low of 10 Oct, followed by the 1,500-pt level. Meanwhile, 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 - 17 Dec 2019