Keep long positions. The FKLI saw bullish momentum continue on Wednesday’s session, rising 5 pts to extend the upside movement and settle at 1,545 pts. The index initially started weaker at 1,534.50 pts and fell to the day’s low of 1,528.50 pts. It managed to find its footing during the early morning and reverse upwards to test the day’s high of 1,546 pts just before the close. The latest positive price action has negated the Bearish Engulfing pattern – the bulls are in control now and gripping the index higher. With the RSI crossing above the 50% threshold, the positive momentum should follow though to test the 1,550-pt resistance level. In the event the bears start taking profits, the 50-day SMA line will provide a strong downside support. As the bullish momentum is building up, we maintain our positive trading bias.

We recommend traders hold on to their long positions, initiated at 1,538.50 pts, or the closing level of 23 Sep. For trading risk management, the stop-loss is kept at 1,521 pts.

The immediate support is marked at 1,530 pts, followed by 1,512 pts, or the low of 21 Sep. Towards the upside, the immediate resistance is eyed at 1,550 pts, followed by the higher hurdle of 1,569.50 pts ie the high of 14 Sep.

Source: RHB Securities Research - 30 Sept 2021