Maintain long positions. The FKLI resumed its upward movement yesterday, adding 6.5 pts to settle at 1,523 pts. The index initially had a strong opening, gapping higher to open at MYR1,520 pts. After touching the 1,517-pt day low, the index jumped to test the 1,526-pt intraday high. Profit taking activties occurred near the 50-day SMA line, where the index pared intraday gains to close at 1,523 pts. With this renewed momentum, the index may see a follow though in the coming sessions – by either attempting to cross the 50-day SMA line or breaching the 1,527.50-pt resistance. If this happens, the index will travel higher to test the 1,550-pt resistance. As long as the index stays above the stop-loss threhold, we make no changes to our positive trading bias.

We recommend traders keep to their long positions initiated at 1,524 pts, or the close of 17 Aug. For risk management, the initial stop-loss is placed at 1,493 pts.

The immediate support revised to 1,511 pts, the low of 19 Aug, followed by 1,493 pts, or the low of 11 Aug. Meanwhile, the nearest resistance is pegged at 1,527.50 pts – the high of 17 Aug, then the higher hurdle of 1,550 pts.

Source: RHB Securities Research - 23 Aug 2021