Maintain long positions. The FKLI moved horizontally, dipping by 2 pts to close at 1,618 pts yesterday. It opened lower, at 1,615.5 pts. In the early part of the session, it touched the day’s low of 1,614 pts and climbed to the day’s high of 1,625 pts. However, bulls trimmed positions in the afternoon, and pared down gains. Based on the last three sessions’ price actions, the bulls were impatient and the index underwent selling pressure at the intraday high. If the index breaks below 1,608 pts in the sessions ahead, selling pressure may increase. However, if it breaches above 1,634.5 pts, buying momentum should pick up and push it to test the high of 2021 (1,649 pts). Since the stop-loss level remains intact, we maintain a positive trading bias.

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

The support levels are marked 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 - 23 Mar 2021