Maintain long positions. The FKLI – tracking regional peers’ weaknesses – slipped below 1,600 pts, retracing 19.5 pts from the previous session to settle at 1,585 pts. It began with a 5.5-pt gap down, opening at 1,599 pts. The bears overshadowed the bulls and, on every intraday rebound, it hit lower lows. The FKLI fell to a day low of 1,583 pts and settled at 1,585 pts. We think that, in the coming one or two sessions, the bears will still try to exert selling pressure on the index. However, looking at the big picture, the 50-day SMA line is moving upwards, and the short-term correction may not breach the nearest support level. As long as the support level is intact, we maintain a positive trading bias.

We recommend traders remain in long positions. We initiated these at 1,590.5 pts, the closing level of 13 Nov. To manage risks, we place our stop-loss below 1,572.5 pts.

The immediate support is lowered to 1,572.5 pts and followed by the 1,550-pt round figure. Towards the upside, the immediate resistance is pegged at 1,600 pts and followed by the recent high at 1,613 pts.

Source: RHB Securities Research - 20 Nov 2020