Maintain long positions, while placing the trailing-stop at the breakeven point. The FKLI registered a positive followup last Friday, after breaching the 200-day SMA line in the prior session. At the close, the index gained 18 pts to settle at 1,548 pts – crossing above the previous resistance levels of 1,534 pts and 1,545 pts. The positive observations further re-inforce the bias that the index is, at the minimum, developing a rebound. This comes after its retracement phase, which took place between 9 Jun and 29 Jun, where it reached a likely interim low of 1,476 pts. Premised on this, we are keeping our positive trading bias.

With the bulls are signalling firm control at this juncture, we advise traders to stay in long positions. We initiated these at 1,530 pts – the closing level of 2 Jun. To manage risks, a stop-loss can now be set at the breakeven mark.

The immediate support is revised to 1,534 pts – the price point of the latest session. This is followed by 1,515 pts. Meanwhile, the immediate resistance is now set at 1,558 pts – the low of 9 Jun, followed by 1,570 pts.

Source: RHB Securities Research - 6 Jul 2020