Maintain long positions, as the bulls are pushing the index above 50-day SMA line. The FKLI formed a white candle to close 8.5 pts higher at 1,596.5 pts, back above the 50-day SMA line. The low and high were recorded at 1,591 pts and 1,599 pts. As the index has moved back above the SMA line, this further underlines our bias that the multi-month countertrend rebound that started from the low of 1,547.5 pts on 10 Oct 2019 is still in place. This view will remain as long as the immediate support of 1,571 pts is not breached towards the downside. We maintain our positive trading inclination.

As the bulls still control the rebound phase, traders should 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 below 1,571 pts.

We revise the immediate support to 1,571 pts, the low of 14 Jan, followed by 1,547.5 pts, the low of 10 Oct. Meanwhile, the immediate resistance remains at the 1,600-pt mark, followed by 1,621.5 pts, the high of 9 Aug, followed by 1,650 pts.

Source: RHB Securities Research - 20 Jan 2020