Maintain long positions. The FKLI continued to move higher during Friday’s session, rising 3 pts from Thursday’s session to settle at 1,512 pts. The index started the session at 1,507.5 pts, but retraced during the early period to a 1,494-pt low before rebounding to the day high of 1,521.5 pts. Later in the session, profit-taking activities took place, which saw the FKLI closing lower at 1,512 pts and forming a neutral candlestick formation known as a “spinning top”. This formation indicates that both bulls and bears were at equal strength – there was selling pressure on the upper shadow and buying interest at the lower shadow. Since the index is trading above the 50-day SMA line, we do think there is a possibility that the bullish trend will resume in the near future – as long it does not break below the 200-day SMA line. The RSI trending above the 50% level also suggests we should maintain our positive trading bias.

We recommend traders stay in long positions. We initiated these at 1,509 pts, which was the closing level of 5 Nov. To manage risks, we moved the stop-loss higher – traders may set their’s below the 1,486-pt mark.

The immediate support is unchanged at 1,486 pts – 22 Oct’s low – and followed by 1,477 pts. On the upside, the immediate resistance is pegged at 1,523 pts and followed by 1,538 pts, ie 12 Oct’s high.

Source: RHB Securities Research - 9 Nov 2020