Maintain long positions. Pending the US Federal Open Market Committee’s latest decision on its monetary policy, the FKLI closed 6.50 pts lower – moving sideways on thin volume. Yesterday, the index opened at 1,622 pts, and dipped to the day’s low of 1,612 pts, before settling in at 1,617 pts. Both bulls and bears were adopting a wait-and-see approach. While volatility was cooling off, the index managed to stay above the 50-day SMA line, showing that the uptrend still valid. A breakout from the immediate resistance level of 1,634.50 pts should see the resumption of bullish momentum. Meanwhile, breaching below the 50-day SMA line may see a deeper correction towards the 200-day SMA line. Since the index is consolidating above the stop-loss level, we are maintaining a positive trading bias.

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

The support levels are maintained at 12 Mar’s low of 1,610 pts, followed by 1,602 pts. Towards the upside, the resistance levels are pegged at 12 Mar’s high of 1,634.50 pts, followed by 14 Jan’s high of 1,649 pts

Source: RHB Securities Research - 18 Mar 2021