Maintain long positions while placing trailing-stop at 1,615 pts. The FKLI fulfilled our expectation of extending its upward move to cross above the resistance point of July’s “Double Top” formation, ie 1,621.5 pts. The index generally trended higher for the whole session, scaling north from a low of 1,596.5 pts to a high of 1,635 pts, before closing 37.5 pts higher at 1,632.5 pts – marking the highest close since July 2019. Intraday price actions indicate that the breakout from the “Double Top” high was decisive, marking firm control by the bulls. The RSI reading, which has crossed above its resistance line but is still below the overbought threshold, also underpins the positive price trajectory. We maintain our positive trading bias.

We recommend that traders remain in long positions. We initiated these at 1,611.5 pts, the closing level of 26 Nov. To manage risks, a stop-loss can be set below 1,615 pts.

The immediate support is revised to 1,621.5 pts, which is the high of the previous “Double Top” formation in July. This is followed by 1,600 pts. Meanwhile the immediate resistance is now pegged at 1,650 pts, followed by 1,665 pts.

Source: RHB Securities Research - 4 Dec 2020