Maintain long positions, moving up trailing-stop. The FKLI closed 19.5 pts higher at 1,490.5 pts yesterday, which placed it above the previous immediate resistance of 1,485 pts. The close also put the index within striking distance to test the vital multi-year support-turned-resistance of 1,500-pt. Price actions in the coming sessions around this resistance is important – more so as the RSI has entered the overbought region. A price rejection signal could heighten the risk for a retracement phase to set in. Pending this, we make no change to our positive trading bias.

As the rebound is still extending, traders should stay in long positions. We initiated these at 1,421.5 pts, the closing level of 19 May. To manage risks, a stop-loss can now be placed below 1,475 pts.

The immediate support is revised to 1,475 pts, the price point of the latest session. This is followed by 1,445 pts, the price point of 27 May. Conversely, the immediate resistance is now pegged at the 1,500-pt mark, followed by 1,516 pts – the current reading of the 200-day SMA line.

Source: RHB Securities Research - 1 Jun 2020