Rebound is extending; maintain long positions. After developing a minor pause around the previous resistance zone of 1,350-1368pt over the previous sessions, the FKLI finally marginally breached above the zone – closing 17 pts higher at 1,372 pts. This is a clear signal that the counter-trend rebound that started from the low of 1,171 pts on 17 Mar is still developing. This rebound set in after the index underwent a multi-month retracement which saw it breaching below its multi-year support level of 1,500 pts, and reached an oversold RSI reading. Until signs of topping out emerge, we are maintaining our positive trading bias.

Traders should remain 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 1,360 pts.

Immediate support is revised to 1,360 pts, price point of the latest session. This is followed by 1,345 pts, the price point of 7 Apr. Moving up, the resistance points are now expected 1,380 pts, followed by 1,400 pts.

Source: RHB Securities Research - 15 Apr 2020