Maintain long positions. The FKLI kept its momentum intact, which saw a strong rebound in the afternoon, adding 0.5 pts to close at 1,524.50 pts. Initially, the index opened stronger at 1,498 pts to test the intraday high of 1,527 pts. However, profit taking was seen in the early session, causing the index to retrace to the 1,1517-pt day low. Strong buying interest in the late session lifted the index to close in positive territory. The long lower shadow indicates that the bulls are still in control of the session as the recent bullish rebound is not over yet. With the RSI crossing the 50% threshold, the momentum is growing stronger and the bulls may attempt to test the 50-day SMA line. Crossing the moving average will see the rebound firm up. Since the bullish momentum is still within sight, we hold on our positive trading bias.

We recommend traders shift to long positions initiated at 1,524 pts, or the close of 17 Aug. To manage the trading risks, the initial stop-loss is fixed at 1,493 pts.

The immediate support is marked at 1,510 pts, the low of 28 Jul, followed by 1,493 pts, or the low of 11 Aug. Conversely, the nearest resistance is at 1,533 pts – the high of 2 Jul, then the higher hurdle of 1,550 pts

Source: RHB Securities Research - 19 Aug 2021