Maintain long positions. The FKLI continued its sideways movement by declining 1.5 pts lower to close at 1,574.5 pts. The index opened at 1,575 pts to climb towards the day’s high of 1,588 pts before falling towards its low at 1,569.5 pts prior to closing. The sideways movement yesterday did not change any significant momentum as compared to the day before. As mentioned in the previous note, as long as the index maintains above the immediate support level of 1,569 pts, a bullish bias is expected to prevail, albeit, struggling near the 200-day SMA line. As such, we stick to our positive trading bias.

Traders should maintain long positions. We initiated these at 1,588 pts, which was also the closing level of 7 May. To mitigate risks, the stop-loss is set below 1,569 pts, or 7 May’s low.

The immediate support level is set at 1,569 pts or 7 May’s low, subsequently at 1,548.5 pts, which is 6 May’s low. Towards the upside, the resistance levels are maintained at 1,592.50 pts or 5 May’s high, and 1,612.5 pts, which was 30 Mar’s high.

Source: RHB Securities Research - 18 May 2021