Maintain long positions as the immediate support is still holding up. The FKLI closed on a weak note yesterday, and came close to testing the revised immediate support of 1,571 pts – the session’s low was at 1,571.5 pts. At the close, it settled 5.5 pts lower at 1,572.5 pts. As mentioned in recent reports, as long as the immediate support is not breached at the close – which points to a valid breach of the SMA line – the index’s multi-month countertrend rebound should remain valid. Premised on this, we keep to our positive trading bias.

In the absence of a valid downside breach from the said SMA line, traders are advised to remain in long positions. We initiated these at 1,568 pts, the closing level of 6 December 2019. To manage risks, a stop-loss can be placed below 1,571 pts.

The immediate support is revised to 1,571 pts, the low of 14 Jan. This is followed by 1,557.5 pts, the low of 9 December 2019. Conversely, the immediate resistance is maintained at the 1,600-pt mark, followed by 1,621.5 pts, the high of 9 August 2019.

Source: RHB Securities Research - 24 Jan 2020