Maintain long positions. The FKLI traded between 1,587 pts and 1,604.5 pts before ending 10 pts higher at 1,601.50 pts. Price actions over the latest two sessions indicate that the index’s upward move is still in place, after it formed a “Bullish Engulfing” on 17 Jul. With the RSI reading at 61.3, there is still room for the index to extend its uptrend. This positive bias should remain in place, provided the 1,585-pt level is not breached. We maintain a positive trading bias in our outlook.

We still recommend that traders stick to long positions. We initiated these at 1,607 pts, the closing level of 17 Jul. To manage risks, a stop-loss can be placed below 1,585 pts.

The immediate support target remains at 1,595 pts – the price point of 17 Jul. This is followed by 1,585 pts. Moving up, the immediate resistance is set at 1,615 pts, followed by 1,621.5 pts – the high of 14 Jul.

Source: RHB Securities Research - 22 Jul 2020