Maintain long positions, as the consolidation phase is still developing. The FKLI tested both the immediate support of 1,592 pts and the 50-day SMA line with an intraday low of 1,591 pts, before closing 17.5 pts weaker at 1,597 pts. We deem the negative session as part of the index’s multi-session consolidation phase, which is taking place around both the 50-day and 200-day SMA lines. Once this consolidation phase is over, the countertrend rebound that started from the low of 1,547.5 pts should resume. Meanwhile, a downside breach of the 50-day SMA line would be a negative price signal as it could mark an end to the said rebound phase. For now, we maintain a positive trading bias. Traders are advised 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. Immediate support is 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 at 1,621.5 pts, the high of 9 Aug, followed by 1,650 pts.

Source: RHB Securities Research - 9 Jan 2020