Maintain long positions. The FKLI saw the recent uptrend taking a pause, falling 2 pts from the previous session to settle at 1,609.5 pts on Friday. Last Friday, the index had a flat opening at 1,610.5 pts. Although the index went higher after the session started, selling pressure was seen near the session high of 1,618 pts. After the bulls took profit near the session high, the index fell to the session low of 1,603 pts. The bulls then returned to the market near the session low, pushing the index higher and closing at 1,609.5 pts. From the price action, the bulls are merely taking profit after the index reached a recent high. The bullish sentiment which emerged since the low of 24 Nov of 1,574 pts is still valid. We expect the index to consolidate sideways or retrace lower for the next few sessions, since the RSI indicator is still moving sideways. As long as the immediate support level is not breached, we maintain our positive trading bias.

We recommend traders to shift to long positions. We initiated these at 1,611.5 pts, or the closing level of 26 Nov. To manage risks, a stop-loss can be set below 1,572,5 pts.

The immediate support is unchanged at 1,574 pts, followed by 1,560 pts. Towards the upside, the immediate resistance remained at the Double Top resistance of 1,621.5 pts, followed by the round figure of 1,630 pts.

Source: RHB Securities Research - 30 Nov 2020