Holding up well in the resistance zone; maintain long positions. Last Friday, the FKLI closed 6 pts lower at 1,356 pts. This was after it reached the low of 1,350 pts, testing the lower boundary of the resistance zone of 1,350-1,368 pts that we have been highlighting over the recent week. The ability of the index to settle within this resistance zone suggests that there is no price reversal signal. This implies the counter-trend rebound that started from the low of 1,171 pts on 17 Mar is still firmly in place. With the RSI reading at slightly above the 50-pt threshold, the rebound has yet to reach a stretched level. We maintain our positive trading bias.

Until a clear price rejection from the resistance zone emerges, 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.

We are keeping the immediate support at 1,345 pts, the price point of 7 Apr. This is followed by 1,325 pts, the price point of 6 Apr. Moving up, the resistance points are at 1,368 pts – the high of 13 Mar, followed by 1,380 pts.

Source: RHB Securities Research - 13 Apr 2020