Maintain long positions. The FKLI recorded its fifth consecutive positive session and settled at 1626.50 pts, up 1.0 pt after a mild pull back from the top. Tracking overnight regional peers’ bullish sentiment, the index gapped up to open at 1630.50 pts. The bulls were booking profits near the session’s high at 1,632.50 pts and saw the index retrace towards the session’s low of 1,622 pts, before settling in at 1,626.50 pts. After a strong rally over the past five sessions, the index may be due for a pull back and consolidate near the 50-day SMA line or 1,602 pts. Both the 50-day and 200-day SMA lines are pointing higher, indicating the uptrend structure remains intact. We foresee the index moving higher after the consolidation is over. As long as the index sustains above the stop-loss level, we maintain our positive trading bias.

We recommend traders maintain long positions, which were initiated at 1,591 pts, or the closing level of 5 Mar. To manage risks, a stop-loss level is placed at 1,589 pts.

The support levels are marked at 1,602 pts, followed by 25 Feb’s 1,589-pt high. Towards the upside, the resistance levels are pegged at 10 Mar’s high of 1,633.50 pts, followed by 14 Jan’s 1,649-pt high.

Source: RHB Securities Research - 12 Mar 2021