Rebound closed at critical level; maintain long positions. Despite not able to maintain most of its intraday gains, the FKLI still managed to end 2 pts higher at 1,382 pts, slightly above the previous immediate resistance of 1,380 pts – the high was posted at 1,395.5 pts. The latest performance suggests the index’s counter-trend is still in place. As mentioned in the previous report, price actions in the coming sessions around the 1,400-1,415-pt level is critical in signalling the index’s directional bias. A price rejection signal from this level would likely mark the end of the index’s said counter-trend rebound. Until this happens, we are keeping our positive trading bias.

With no price exhaustion signal spotted in the latest session, 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 below 1,360 pts.

The immediate support is pegged at 1,360 pts, price point of 14 Apr. This is followed by 1,345 pts, the price point of 7 Apr. Moving up, the immediate resistance is set at 1,400 pts round figure, followed by 1,415 pts – a level slightly above the 50-day SMA line.

Source: RHB Securities Research - 17 Apr 2020