Stop-loss triggered; initiate long positions. The FKLI bounced higher, following the recent sideways momentum, as it jumped 13.5 pts to settle at 1,500.5 pts yesterday – breaching the 1,500-pt resistance. The index opened at 1,487 pts, and immediately propelled north until the end of the session. It hit an intraday high of 1,503.5 pts before retracing mildly to close at 1,500.5. The latest long white body candlestick, crossing above the 1,500-pt threshold to print a “higher high” bullish pattern, suggests that the recent bears have turned to bulls. Supported by the strengthening of the RSI that is eyeing towards the 50% level, we believe the positive momentum will persist in the coming sessions. Since the stop-loss has been triggered, we change to a positive trading bias.

We close out our short positions initated at 1,496.50 pts or the closing of 1 Dec, after the stop-loss at 1,500 pts was triggered. Conversely, we initiate long positions at the closing level of 1 Dec at 1,496.5 pts. To mitigate trading risks, the initial stop-loss is set at 1,485.5 pts – the low of 21 Dec.

The immediate support is kept at 1,500 pts, followed by 1,485.5 pts – the lowest of 21 Dec. Towards the upside, the nearest resistance is pegged at 1,512.5 pts – the high of 1 Dec, followed by 1,533 pts, or the high of 23 Nov.

Source: RHB Securities Research - 22 Dec 2021