Maintain long positions, with trailing stop set higher. The FKLI unexpectedly fell into negative momentum yesterday after breaking the immediate support to close 16.5 pts lower at 1,607.5 pts. The index opened at a neutral 1,624 pts, then swiftly moved lower throughout the session by tapping the low of 1,603 pts before mildly rebounding to close at 1,607.5 pts. This has cancelled the recent breakout above the 1,612.5-pt level – igniting the bearish momentum towards its immediate support level. With the RSI weakened near 50% from the 60% level, it raises the odds for the index to move lower in the immediate term. Since the stop loss set earlier has not triggered, we stick to our positive trading bias with a trailing stop revised higher.

Traders should stick to long positions. We initiated these at 1,596 pts, or the closing level of 7 Apr. For risk management purposes, the trailing stop is raised to 1,600 pts.

The support levels are revised at 1,588 pts (8 Apr’s low), followed by 6 Apr’s low at 1,570.5 pts. Towards the upside, the immediate resistance level is revised to its previous support of 30 Mar’s high at 1,612.5 pts, then 1,626 pts, or 26 Apr’s high.

Source: RHB Securities Research - 28 Apr 2021