Moving up trailing-stop while maintaining long positions. The FKLI underwent a sharp negative intraday price reversal, closing flat at 1,562 pts – off the session’s high of 1,586.5 pts. The price reversal came on the index’s recent upward move, which saw the RSI hitting an overbought reading. If a negative follow-through in the coming sessions occurs, with a downside breach of the 1,550-pt support mark, chances of the FKLI entering a correction phase will improve, with the possibility of retesting the 200-day SMA line. Until this happens, we maintain our positive trading bias.

Traders should remain 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 1,550 pts.

We revise the immediate support to 1,550 pts (the price point of 5 Jun), followed by 1,540 pts, the price point of 4 May. Moving up, the immediate resistance is now pegged at 1,575 pts, followed by 1,586.5 pts – both are the latest session’s price points.

Source: RHB Securities Research - 9 Jun 2020