Maintain long positions. The FKLI saw its bullish momentum extend – breaking past the physcological level of 1,600 pts. Last Friday, the index opened at 1,600 pts to touch only 0.5 pts lower at 1,599.50 pts. Underpinned by strong buying interest, the index boosted towards the day’s high at 1,613.50 pts. The bulls then took a breather to close at 1,612 pts, marking an increase of 17 pts from Thursday’s session. With the latest price action, the Bearish Marubozu pattern that formed on 31 Mar is negated by the recent bullish momentum. Coupled with the RSI indicator, which is also breaching above the 50% level, the bullish momentum may continue to extend further. Breaching the immediate resistance of MYR1,612.50 may see the formation of a “higher high” pattern. Since forming at 6 Apr’s low of 1,570.50 pts, the balance of strength is leaning towards the bulls, and we therefore keep our positive trading bias.

We recommend that traders stay in long positions, which were initiated at 1,596 pts, or the closing level of 7 Apr. To manage risks, the stop-loss is adjusted higher to 1,588 pts.

The immediate support level is revised to 1,588 pts, followed by 6 Apr’s low of 1,570.50 pts. Towards the upside, the immediate resistance is kept at 30 Mar’s high of 1,612.5 pts, followed by 1,625 pts.

Source: RHB Securities Research - 12 Apr 2021