Trailing-stop triggered; initiate long positions. Positive momentum on the FKLI accelerated yesterday, surging 25 pts to close at 1,524 pts. The index opened at 1,498 pts, then strong momentum propelled it to print the day’s high of 1,527.50 pts, just before the close. With the latest long white candlestick, the bulls are back in the driver’s seat and are eyeing the 50-day SMA line. Breaching the moving average or crossing above the 1,533-pt resistance should prolong the rally. However, selling pressure may emerge near the 50-day SMA line. Meanwhile, if the index retraces on profittaking, a strong support level would be found at 1,510 pts. Since the trailing-stop threshold has been breached, we shift to a positive trading bias.

We closed out the short positions which we initiated at 1,569.50 pts, or 11 Jun’s close, as the trailing-stop of 1,508 pts has been triggered. Conversely, we initiate long positions at the close of 17 Aug, or 1,524 pts. To mitigate the trading risks, the initial stop-loss is at 1,493 pts.

The immediate support has been revised to 1,510 pts, the low of 28 Jul, followed by 1,493 pts, or the low of 11 Aug. Towards the upside, the immediate resistance is at 1,533 pts – the high of 2 Jul, then 1,550 pts.

Source: RHB Securities Research - 18 Aug 2021