Maintain long positions as the immediate support continues to persevere. The FKLI ended the latest session on the immediate support of 1,571 pts, indicating a 1.5-pt decline. The low and high were posted at 1,566.5 pts and 1,574.5 pts. As indicated in our recent reports, as long as the said immediate support is not breached towards the downside, there would still be no confirmation for a clear breakdown from the 50-day SMA line. Should the said level be breached in the coming sessions, it could potentially mark the end of the index’s multi-month countertrend rebound that started from 1,547.5 pts posted on 10 Oct 2019. For now, we stay with our positive trading bias.

As the said support is still not breached, traders are advised to remain in long positions. We initiated these at 1,568 pts, the closing level of 6 Dec 2019. To manage risks, a stop-loss can be placed below 1,571 pts.

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

Source: RHB Securities Research - 28 Jan 2020