Holding up well in the resistance zone; maintain long positions. The FKLI added 10.5 pts to close at 1,362 pts yesterday. The high was posted at 1,364.5 pts. The positive session means that the index is still recording a firm performance in the resistance zone of 1,350-1,368 pts. This implies the counter-trend rebound that started from the low of 1,171 pts on 17 Mar is still in progress. The rebound resumed after the index underwent a relatively narrow consolidation phase between 30 Mar and 2 Apr. Additionally, the RSI reading is picking up – but has not yet reached the overbought threshold yet. As such, we make no change to our positive trading bias.

As the bulls are able to maintain firm control in the said resistance zone, we recommend that traders 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 below 1,345 pts.

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

Source: RHB Securities Research - 10 Apr 2020