Maintain long positions. The FKLI is consolidating sideways, even though it closed lower last Friday. The index opened modestly higher at 1,625.50 pts, then moving southwards to the day’s low of 1,611.50 pts and rebounded to close at 1,620 pts. The RSI indicator remains above the 50% threshold, which indicates that the bullish momentum is still intact. As such, the benchmark index may retest the immediate resistance of 1,634.50 pts in coming sessions. If it manages to break above the immediate resistance, it should then challenge the high of 2021, ie 1,649 pts. Since the index is consolidating above the stop-loss level, we maintain a positive trading bias.

We recommend that traders stay in long positions, which we initiated at 1,591 pts – the closing level of 5 Mar. To manage risks, a trailing-stop is set below 1,608 pts.

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

Source: RHB Securities Research - 22 Mar 2021