Maintain long positions. The FKLI reversed its earlier session’s weak tone to hand in a 18-pt gain, closing at 1,595.5 pts and crossing above the previous immediate resistance of 1,586.5 pts after testing it multiple times in recent sessions. This is a positive signal as it invalidated the possibility for a price rejection from the said level, indicating that the bulls are still in control over the index’s rebound leg. The RSI reading is picking up, but has yet to reach an overbought threshold. Maintain 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 revised to 1,580 pts – price point of the latest session. This is followed by 1,565 pts – price point of 8 Jul. Moving up, the immediate resistance is now eyed at 1,600 pts, followed by 1,620 pts.

Source: RHB Securities Research - 13 Jul 2020