Maintain long positions. FKLI continued its upward movement for the third consecutive session, gaining 14.5 pts to settle at 1,585.50 pts. Yesterday, the index started off at 1,574 pts. After barely touching the day’s low of 1,572.50 pts, it jumped to the day’s high of 1,595.50 pts. Mild profit-taking near the 1,590-pt level saw the index retracing to close at 1,585.50 pts. With the latest session, it has negated the Bearish Crossover of two moving averages that happened in early July. The bullish technical set-up is also echoed by the RSI, which is slanting upwards – suggesting a strong momentum ahead. We do not discount the possibility of profit-taking in the coming sessions, but believe 1,572.50 pts will offer a strong support point. As the parabolic movement that started from the 50-day SMA line remains intact, we make no change to our positive trading bias.

Traders should stay in long positions, which were initiated at 1,524 pts, or the close of 17 Aug. To control the downside risks and protect profits, we adjust the trailing-stop upwards to 1,568 pts.

The immediate support is marked at 1,572.50 pts, the low of 26 Aug, followed by 1,550 pts. The immediate resistance is at 1,590 pts, followed by 1,599.50 pts or the 2 Jun’s high.

Source: RHB Securities Research - 27 Aug 2021