Maintain long positions. The FKLI generally traded on a weak tone in the latest session, sliding from a high of 1,609.5 pts to a low of 1,575.5 pts before ending at 1,591.5 pts – indicating a 15.5-pt decline. The weak session can be attributed to possible profit taking activity following the prior session’s sharp rebound. Towards the downside, provided the 1,585-pt immediate support is not breached, the ongoing positive trading tone should remain in place.

We maintain our recommendation for traders to stay in long positions. We initiated these at 1,607 pts, which is the closing level of 17 Jul. To manage risks, a stop-loss can be placed below 1,585 pts.

We are keeping the immediate support at 1,585 pts – price point of 17 Jul. This is followed by 1,564 pts, which is the low of 16 Jul. Conversely, the immediate resistance is set at 1,615 pts, followed by 1,621.5 pts – the high of 14 Jul.

Source: RHB Securities Research - 21 Jul 2020