Maintain long positions. The FKLI experienced a relatively volatile trading session yesterday. After hitting a new high (from the low in May) of 1,623 pts earlier in the session, the index slid to a low of of 1,592.5 pts, before rebounding to settle at 1,614 pts – a 1.5-pt decline. Despite its inability to cross above the 1,621.5-pt resistance, the sharp intraday rebound off the session’s low suggests there was no price reversal signal. All in, the index’s rebound is still considered intact. Maintain our positive trading bias.

As the bulls are still able to retain control over the price trend, we recommended traders stay in long positions. We initiated these at 1,607 pts, the closing level of 17 Jul. To manage risks, we revise our stop-loss to below 1,580 pts.

The immediate support is eyed at 1,600 pts, followed by 1,580 pts. Moving up, we are peg the immediate resistance at 1,621.5 pts – the high of 14 Jul, followed by 1,630 pts.

Source: RHB Securities Research - 30 Jul 2020