Maintain long positions. The FKLI saw mild buying interest yesterday, and gained 6 pts to settle at 1,623 pts. Tracking the overnight bullish sentiment on its regional peers, the index opened at 1,623.50 pts, and marched to the day’s high of 1,631 pts. Despite a strong display early in the session, the momentum faltered and the FKLI pared down gains on profit-taking activities. It did not challenge the immediate resistance of 1,634.50 pts, and could head towards a sideways consolidation before buying momentum picks up again. As long as the index is consolidating and staying above the 20-day SMA line, the uptrend structure should stay intact. Since the pattern is still bullish, we maintain a positive trading bias.

We recommend that traders stick 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 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