Maintain long positions pending confirmation for a price rejection. The FKLI failed to sustain its earlier session’s positive performance, which, at one point, saw it test the immediate resistance of 1,620 pts, with a high of 1,621.50 pts. This was before it slid lower to end 8 pts weaker at 1,597 pts – slightly below the 1,600-pt round figure. The adverse price reaction from the said resistance is signalling a possible price rejection. However to confirm this, we believe the immediate support of 1,590 pts need to be breached at the closing. Pending this, we are keeping our positive trading bias.

Until a trend reversal signal appears, 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 1,590 pts.

The immediate support is maintained at 1,590 pts, followed by 1,580 pts – both are 10 Jul’s price points. Meanwhile, the immediate resistance is revised to 1,610 pts – derived from the latest candle. This is followed by 1,620 pts.

Source: RHB Securities Research - 15 Jul 2020