Maintain long positions. The FKLI failed to stage a rebound yesterday, and retraced 2 pts to close lower at 1,522 pts – still under the consolidation phase. The index opened at 1,523.50 pts and surged towards the day’s high of 1,533 pts. However, the bulls failed to sustain their intraday gains, so the index moved south to print the day’s low of 1,518 pts, before closing. With the RSI still trending below the 50% threshold, the momentum remains weak as investors are still maintaining a wait-and-see approach. However, as the futures contract is getting nearer to the month-end expiry, the index may see volatility pick up again in the coming sessions. As long as the FKLI continues to stay above the 1,500-pt mark, we believe the downside risk is limited – and will continue to hold on to a positive trading bias.

Traders should 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 set at 1,500 pts.

The immediate support is still at 1,512 pts (11 Nov’s low), while the next support level is at 1,505 pts (5 Oct’s low). Meanwhile, the nearest resistance stays at 1,537.50 pts (9 Nov’s high), followed by 1,546.50 pts (3 Nov’s high).

Source: RHB Securities Research - 24 Nov 2021