Maintain long positions. The FKLI struggled to rebound further yesterday amid strong intraday profit-taking – it shed just 0.5 pts to close at 1,521.5 pts, ie slightly above the opening level. Yesterday, the benchmark index opened weaker at 1,519.50 pts but immediately jumped upwards towards the intraday high of 1,527 pts. However, the bullish momentum was shortlived. Strong selling pressure kicked in from the day’s peak to drag the index to the day’s low of 1,517 pts, before bouncing off mildly and oscillating sideways towards the end of the session. The latest white body candlestick with a long upper shadow indicates a neutral momentum during its consolidation process between the 1,537.50-pt resistance and 1,512-pt support. Since the support remains intact, we still expect a “higher low” formation to be drawn in the coming sessions. As such, we stick to a bullish trading bias unless the stop-loss has been breached.

We advise traders to stick to long positions, which were initiated at 1,532 pts or the closing level of 12 Nov. To manage trading risks, the initial stop-loss has been pegged to 1,500 pts.

The immediate support is at 1,512 pts – 11 Nov’s low – followed by 1,505 pts or the low of 5 Oct. The nearest resistance is set at 1,537.50 pts (9 Nov’s high), then 1,546.50 pts (3 Nov’s high).

Source: RHB Securities Research - 18 Nov 2021