Maintain long positions as the 1,585-pt support is still holding up. The FKLI generally traded lower and at one point, it hit a low of 1,583 pts to test the support of 1,585 pts, before closing 13 pts lower at 1,588.5 pts. Looking at the index’s price actions over the past three sessions, we believe the 17 Jul’s “Bullish Engulfing” price reversal signal is still valid until the 1,585-pt support level is breached at the close. Hence, we are keeping our positive trading bias.

We advise traders to stay in 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 is revised to 1,585 pts followed by 1,564 pts – the low of 17 Jul’s “Bullish Engulfing” formation. Conversely, the immediate resistance is now set at 1,600-pt round figure, followed by 1,615 pts.

Source: RHB Securities Research - 23 Jul 2020