Bulls are trying to break away from the minor consolidation phase; maintain long positions. The FKLI charted a white candle and gained 15 pts yesterday, closing at 1,614.5 pts. Trading ranged between 1,604.5 pts and 1,621 pts. The positive session suggests that the index was attempting to break away from its multi-session consolidation, which is taking place around the 50-day and 200-day SMA lines. Towards the upside, a firm upside breach of the 200-day SMA line likely indicates the extension of the index’s counter-trend rebound phase. We maintain our positive trading bias.

As we still believe the countertrend rebound still has legs, traders are recommended to 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 at the breakeven level.

We are keeping the immediate support 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. Towards the upside, the immediate resistance is at 1,621.5 pts, the high of 9 Aug, followed by 1,650 pts.

Source: RHB Securities Research - 8 Jan 2020