Maintain long positions as there is no clear price reversal signal. The FKLI gave up 13 pts to close at 1,351.5 pts. Trading ranged between 1,346.5 pts and 1,356.5 pts. Despite the soft closing, the index is still trading within the resistance zone of 1,350-1,368 pts, indicating no clear rejection signal. As such, we see the weak session as a minor pause by the bulls after the recent sessions’ upward move. All in, the counter-trend rebound that started from the low of 1,171 pts on 17 Mar was meant to correct the previous multi-month retracement. The RSI reading of 48.9 is indicating that the said rebound has yet to reach a stretched level. Maintain our positive trading bias.

In the absence of a price reversal signal, we recommend traders to stay in long positions. We initiated these at 1,330.5 pts, the closing level of 6 Apr. To manage risks, a stop-loss can be placed at the breakeven mark.

The immediate support is maintained at 1,345 pts, price point of 7 Apr. This is followed by 1,325 pts, price point of 6 Apr. Towards the upside, the resistance points are pegged at 1,368 pts – the high of 13 Mar, followed by 1,380 pts.

Source: RHB Securities Research - 9 Apr 2020