Maintain long positions. The FKLI bucked regional trends to continue its bullish momentum, adding 11 pts to settle at 1,602 pts – a level near to the 50-day SMA line. On Monday, the index opened higher at 1,596 pts and climbed to the day’s high of 1,617 pts. It pared the gains during the afternoon session to close at 1,602 pts. Despite the bulls taking profit during the final hour – leaving a Shooting Star formation – the FKLI managed to break above the downtrend line. We think there might be a minor pullback in the coming session to retest the 1,577-pt level. If it can sustain above the latter threshold, we think the bullish momentum will lift it higher towards 1,616 pts. Since the index is forming a “higher high” bullish pattern, we maintain a positive trading bias.

We recommend traders to shift to long positions, which were initiated at 1,591 pts, or the closing level of 5 Mar. To manage risks, the stop-loss level is adjusted higher to 1,564 pts.

The support levels are marked at 1 Mar’s high of 1,577 pts and 5 Mar’s 1,564-pt low. Towards the upside, the resistance levels are pegged at 17 Feb’s high of 1,609.50 pts and followed by 1,616 pts.

Source: RHB Securities Research - 8 Mar 2021