Maintain long positions. After pulling back from the recent top printed last Friday, profit-taking activities continued at a mild pace yesterday – and the FKLI remained above the 50-day SMA line. It closed 7 pts lower at 1,599.5 pts. The index opened at 1,604.5 pts and touched the day’s high of 1,609 pts immediately, before shifting direction to hit the day’s low of 1,595 pts. As the RSI trend is sloping upwards, while the index is staying above the 50-day SMA line, the positive momentum is likely to stay on course. Investors should be cautious, as the FKLI may dip slightly below the 50- day SMA line to move sideways between the immediate support of 1,588 pts and the resistance 1,612.5 pts. Unless the momentum reverses and the index falls below the immediate support of 1,588 pts, the uptrend should remain intact. As such, we maintain a positive trading bias.

We recommend that traders stick to long positions. We initiated these at 1,596 pts, or the closing level of 7 Apr. To manage risks, a stop-loss is set below 1,588 pts.

The immediate support is maintained at 1,588 pts, followed by 6 Apr’s low of 1,570.50 pts. Towards the upside, the resistance levels set at 30 Mar’s high of 1,612.5 pt, followed by 1,625 pts – 30 Mar’s high.

Source: RHB Securities Research - 20 Apr 2021