Maintain long positions. The FKLI struggled to stay above the immediate resistance of 1,586 pts, adding 1 pt to settle higher at 1,588.50 pts. On Monday, the index initially opened at 1,584 pts. After recording the day’s low of 1,583 pts, the index jumped higher to test the day’s high at 1,597.50 pts. It stayed near the intraday high for most of the session, but gave up the bulk of its intraday gains at the eleventh hour, only managing to register a minor gain to move marginally higher above the immediate support. Although the index stayed above the immediate support, observe the RSI has fallen below the trendline, this indicates that the index may continue to move sideways for consolidation along the immediate support. Breaching this support will see the index correct towards the 200-day SMA line. Despite cautious sentiment looming, we are keeping our positive trading bias until the trailing-stop is triggered.

We advise traders to hold on to their long positions, initiated at 1,556 pts or the closing level of 6 Oct. To mitigate trading risks, the trailing-stop is placed at the 1,586-pt level, which is the immediate support.

The immediate support remains at 1,586 pts (14 Oct’s low), followed by the lower support at 1,564 pts (11 Oct’s low). Conversely, the nearest resistance is pegged at 1,600 pts, followed by 1,610.50 pts or the high of 30 Aug.

Source: RHB Securities Research - 25 Oct 2021