Trailing-stop triggered; initiate long positions. The FKLI underwent a strong technical rebound last Friday, jumping 16.50 pts to settle at 1,532 pts. The benchmark index gapped up and opened higher at 1,518 pts – sentiment became positive after it climbed back towards the 1,523.50-pt level. The bulls drove the market for the rest of the session, and the index rose to print the day’s high of 1,536 pts, before closing. The latest long white candlestick negates the previous bearish breakout, so the FKLI is poised to move higher, to test the resistance of 1,537.50 pts. The technical rebound would extend further if the immediate resistance is breached. Meanwhile, the previous resistance of 1,523.50 pts has become the support now. As the stop-loss has been breached, we switch our trading bias to a positive one.

We closed out the short positions that were initiated at 1,584 pts or the closing level of 26 Oct, as the trailing-stop of 1,524 pts has been triggered. Conversely, investors can initiate long positions at the closing level of 12 Nov, ie 1,532 pts. To mitigate the downside risks, an initial stop-loss is set at 1,500 pts.

The nearest support shifts to 1,523.50 pts (1 Nov’s low), followed by 1,512 pts (11 Nov’s low). The immediate resistance is pegged at 1,537.50 pts, the high of 9 Nov, then at 1,546.50 pts or 3 Nov’s high.

Source: RHB Securities Research - 15 Nov 2021