Maintain long positions as the countertrend is still in place. The FKLI gave back most of its intraday gains to settle 0.5 pt up at 1,597.5 pts. The high was posted at1,607 pts. The latest session’s lack of a positive follow-up from the prior session’s encouraging price reaction of the immediate support and 50-day SMA line, suggests that the bulls are still struggling to break away from the multi-session consolidation phase. Nevertheless, as long as the index is still able to hold above the 50-day SMA line, the countertrend rebound that started from the low of 1,547.5 pts is still considered in place. Maintain our positive trading bias. As the index is merely experiencing a relatively narrow consolidation, 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. 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. 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 - 10 Jan 2020