Maintain long positions. The FKLI rose 8.5 pts, to settle at 1,599 pts yesterday. It opened with a 7pt gap, at 1,597.5 pts. During the mid-day, the index saw some selling pressure and found the low at 1,587 pts. After it reached the day’s low, sentiment turned positive – then the FKLI recovered gradually to the day’s high of 1,607 pts, breaching the psychological level of 1,600 pts. Since there was a long upper shadow, we will not rule out the possibility that the index will consolidate sideways before testing the 1,600-pt mark again. As long the support level remains intact, we make no change to our positive trading bias.

We recommend that traders switch to long positions. We initiated these at 1590.5 pts, the closing level of 13 Nov. To manage risks, we set a stop-loss below 1,560 pts.

The immediate support remains unchanged at 1,560 pts, followed by the low of 11 Nov, ie 1,545 pts. Towards the upside, the immediate resistance is the recent high of 1,607 pts, followed by 1621.5 pts, ie the Double Top.

Source: RHB Securities Research - 17 Nov 2020