Maintain long positions as the countertrend is still not showing signs of exhaustion. The FKLI ended the latest session 4 pts higher, at 1,613 pts. The low and high were recorded at 1,606.5 pts and 1,619 pts. Based on recent session’s price actions, we believe the FKLI is undergoing a minor consolidation around the 50-day and 200-day SMA lines, ie the countertrend rebound that started from the low of 1,547.5 pts is still in place. Towards the downside, breaching the 50-day SMA line could increase the risk of the rebound ending. For now, we maintain a positive trading bias.

As there is no price rejection from the 200-day SMA line, we recommend that traders remain in long positions. We initiated these at 1,568 pts, the closing level of 6 Dec. To manage risks, we revise the stop-loss to the breakeven level.

The immediate support is pegged at 1,592 pts, near the midpoint of 18 Dec’s “Long White Day” candle, followed by 1,547.5 pts, the low of 10 Oct. Meanwhile, the immediate resistance is expected at 1,621.5 pts, the high of 9 Aug. This followed by 1,650 pts.

Source: RHB Securities Research - 6 Jan 2020