Maintain long positions. The FKLI broke past the psychological level of 1,600 pts, adding 9 pts to settle at 1,608 pts yesterday. It opened with a 4.5-pt gap, at 1,603.5 pts. However, after the positive opening, profit-taking ensued and the index retraced towards the day’s low of 1,593 pts. At the mid-day, bullish buying interest emerged near the day’s low, and index recouped earlier losses, moving towards the day’s high of 1,613 pts. With the RSI indicator still pointing upwards, we believe the bullish momentum will stay intact. Based on latest candlestick pattern, we do not see any exhaustion signals in the uptrend yet. As long the downside support level remains intact, we maintain a positive trading bias.

We recommend that traders remain in long positions. We initiated these at 1590.5 pts, the closing level of 13 Nov. To manage risks, we adjust our stop-loss to 1,572.5 pts.

The immediate support is at 1,587 pts, followed by the low of 13 Nov, ie 1,572.5 pts. Towards the upside, the immediate resistance is the recent high of 1,613 pts, followed by 1621.5 pts, ie the Double Top.

Source: RHB Securities Research - 18 Nov 2020