Maintain long positions as the counter-trend rebound is still developing. The FKLI continued to extend its recent sessions’ counter-trend rebound, adding 47 pts to close at 1,330 pts – above the 1,300-pt round figure. The said counter-trend rebound is taking place to correct the index’s previous multi-month retracement phase which reached an oversold RSI reading recently. Provided there is no price exhaustion signal to mark the top of a rebound, we are keeping our positive trading bias.

As the bulls are still showing strength to extend the rebound, we recommend traders to stay in long positions. We initiated these at 1,282.5 pts, the closing level of 24 Mar. For risk management purposes, a stop-loss can be placed at the breakeven mark.

We revise the immediate support to 1,310 pts, followed by 1,290.5 pts – both are derived from the latest candle. Moving up, the immediate resistance is now pegged at 1,350 pts, followed by 1,370 pts.

Source: RHB Securities Research - 26 Mar 2020