Maintain long positons, as there is no confirmation of a reversal yet. The FKLI closed 15 pts higher at 1,577 pts yesterday, after crossing above the previous immediate resistance of 1,575 pts. There was no negative follow-up from the prior session’s negative intraday price reversal. This indicates that the index’s rebound, which started from the low of 1,171 pts on 17 Mar, is still firmly in place. It also comes despite the RSI flashing out an overbought reading. We maintain our positive trading bias, for now.

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 keep the immediate support at 1,550 pts, the price point of 5 Jun. This is followed by 1,540 pts, the price point of 4 May. Meanwhile, the immediate resistance is revised to 1,586.5 pts – the high of 9 Jun, followed by 1,600 pts.

Source: RHB Securities Research - 11 Jun 2020