No evidence for a negative trend reversal; maintain long positions. The FKLI failed to sustain its intraday positive tone, settling 8 pts lower at 1,577.5 pts. Trading took place between 1,568.5 pts and 1,591.5 pts. While the index has not been able to cross above the 1,586.5-pt immediate resistance over the past three sessions, there was no price signal to indicate a potential price reversal from the said level either. This implies the index’s rebound is still firmly in place. Hence, we are keeping our positive trading bias.

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 below 1,565 pts.

The immediate support is maintained at 1,565 pts – price point of 8 Jul, followed by 1,550 pts – near 6 Jul’s low. Conversely, the immediate resistance is pegged at 1,586.5 pts – 9 Jun’s high. This is followed by 1,600 pts.

Source: RHB Securities Research - 9 Jul 2020