RHB Retail Research
FKLI - Persistent Upward Momentum
Bullish sentiment remains intact; maintain long positions. The FKLI’s upside move continued as expected, as a second consecutive black candle was formed yesterday. This indicates a persistent upward momentum. It rose 6 pts to close at 1,617 pts. In view of yesterday’s closing, the FKLI has marked a higher close above the rising 50-day SMA line, implying that the bullish sentiment remains unchanged. Technically, yesterday’s white candle can be viewed as a continuation of the bulls extending the rebound from 3 Dec’s “Hammer” pattern. As such, we think the bulls are still in control of the market.
Based on the daily chart, the immediate support level is seen at 1,592 pts, set near the midpoint of 18 Dec’s “Long White Day” candle. Meanwhile, the next support is situated at 1,547.50 pts, ie the previous low of 10 Oct. Towards the upside, we anticipate the immediate resistance level at 1,621.50 pts, obtained from 9 Aug’s high. Meanwhile, the next resistance is maintained at the 1,650-pt round figure.
Hence, we advise traders to maintain long positions, following our recommendation of initiating long above the 1,568-pt level on 9 Dec. In the meantime, a trailing-stop can be set below the 1,592-pt mark in order to secure part of the gains.
Source: RHB Securities Research - 31 Dec 2019
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