Stop-loss triggered; Initiate long positions. After moving sideways for the past four sessions, the FKLI shifted to its bullish gear, adding 24 pts to settle at 1,591 pts. Last Friday, although the index opened lower at 1,565.50 pts and dipped to the day’s low of 1,564 pts, the bullish momentum picked up in the afternoon, lifting it to close higher at 1,591 pts. By breaching the previous resistance of 1,589 pts, the index is forming a “higher high” – an early sign that the correction phase is over, with the resumption of an uptrend. Now the bulls are eyeing to cross the overhead resistance 50-SMA line or reclaim the psychological 1,600-pt level. Coupled with the RSI indicator crossing the 50% threshold, which shows the bullish momentum is growing, we shift from negative to a positive trading bias.

Our previous short positions, which were initiated at 1,565 pts or the closing level of 1 Mar, were closed out during the latest session after triggering the stop-loss level at 1,589 pts. Conversely, we initiate long positions at the closing level of 5 Mar. To manage risks, a stop-loss can be set below 1,550 pts.

The support levels are revised to 5 Mar’s low of 1,564 pts, followed by 1,553 pts. Towards the upside, the resistance levels are marked at the round figure of 1,600 pts, followed by 1,616 pts.

Source: RHB Securities Research - 8 Mar 2021