Maintain long positions. The FKLI recorded its third straight positive session, adding 13.50 pts to settle at 1,615.50 pts. On Tuesday, the index opened higher at 1,606.50 pts. After briefly touching the session’s low of 1,605.50 pts, the index reversed upward to record a high of 1,619 pts before settling in at 1,615.50 pts. With the latest price action, the index has managed to bounce higher off the 50-day SMA line – this will lead the said moving average to curve up and further strengthen the uptrend to test higher resistance levels. If a correction were to happen in the coming sessions, we think the 50-day SMA line will lend strong support at the 1,600-pt level. Meanwhile, a breakout above February’s high of 1,620 pts will enhance buying pressure to test the next resistance level at 1,635 pts. Since the index is riding on a “higher high” bullish momentum, we will stick to our positive trading bias.

We recommend traders to maintain 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 1,575 pts.

The support levels are marked at 5 Mar’s closing of 1,591 pts and 5 Mar’s 1,564-pt low. Towards the upside, the resistance levels are pegged at 15 Feb’s high of 1,620 pts, followed by 1,635 pts.

Source: RHB Securities Research - 10 Mar 2021