Maintain long positions. Profit-taking activities continued yesterday, which led the FKLI to shed 6 pts to close at 1,597.50 pts – falling below the 1,600-pt psychological level. The index opened at 1,606 pts, and touched the day’s high of 1,610 pts, before switching the intraday direction. It fell towards the day’s low of 1,596 pts to end the session at 1,597.50 pts. Altough the index pulled back below 1,600 pts, both the 50-day and 200-day SMA lines still pointed higher, indicating that the uptrend remains intact. If the RSI indicator falls below the 50% threshold, expect the pullback to be extended to test the support of 1,588 pts, near the 50-day SMA line. As long as the correction does not trigger a stop-loss, we continue to maintain a bullish trading bias.

We recommend that traders maintain long positions, which were initiated at 1,596 pts, or the closing level of 7 Apr. To manage risks, the stop-loss is placed below 1,588 pts.

The immediate support level is unchanged at 1,588 pts and, subsequently, 1,570.50 pts, which is 6 Apr’s low. Towards the upside, the immediate resistance stays at 30 Mar’s high of 1,612.5 pt, followed by 1,625 pts.

Source: RHB Securities Research - 14 Apr 2021