Maintain long positions. The FKLI’s recent profit-taking has been set-off with mild buying interest after it inched up 5 pts yesterday. Following a rebound from the 200-day SMA line, the index opened higher at 1,583 pts, then oscillated between 1,579 pts and 1,586.5 pts to close stronger at 1,586 pts. As notified in the previous note, the mild profit-taking activity is expected to be short-lived, which was justified yesterday with a mild positive rebound while forming a “higher low” pattern. These indicates that the uptrend should remain intact. Hence, we retain our positive trading bias.

We suggest traders to maintain long positions. We initiated these at the closing level of 28 May at MYR1,591.50. To mitigate risks, the initial stop-loss is set below 1,569 pts.

The support levels remain at 1,579 pts, and 1,569.5 pts. Towards the upside, the immediate resistance level is maintained at 1,592.5 pts, which was 5 May’s high, followed by 1,603.0 pts, or the high of 3 May.

Source: RHB Securities Research - 2 Jun 2021