Maintain long positions. The FKLI failed to sustain to its intraday gains, settling 7 pts lower at 1,590 pts. The high was posted 1,613 pts. The negative session follows the prior session’s intraday negative price reversal, which came in after the index failed to cross above the 1,620-pt resistance. We still believe that for confirmation of a trend reversal, the 1,590- pt support needs to be invalidated at the closing. For now, maintain our positive trading bias.

Until a trend reversal is confirmed, 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 set at 1,610 pts – derived from 14 Jul’s candle. This is followed by 1,620 pts

Source: RHB Securities Research - 16 Jul 2020