Maintain long positions. Bullish pressure on the FKLI continued, and the index closed 6 pts higher yesterday, at 1,541.5 pts – extending further above the 50-day average line. It opened at 1,537 pts, then touched the intraday low of 1,532.5 pts before propelling north towards the end of the session. It hit the day’s high of 1,545 pts before retracing mildly at the close. Yesterday’s white body candlestick – with upper and lower shadows – indicates that the recent rally is expected to extend towards the 200-day average line or 1,553.6 pts – amid the “higher high” bullish structure. Moreover, the strengthening of the RSI at 64% suggests that buyers may have more room to go on until the RSI reaches above the overbought territory of 70%. With that, we maintain a positive trading bias until the revised trailing-stop is breached.

We recommend that traders stick to the long positions initiated at 1,496.5 pts, or the closing level of 1 Dec. To mitigate trading risks, we revise the trailing-stop to 1,526.11 pts, based on the latest 50-day average line.

The immediate support is fixed at 1,533 pts or 23 Nov’s high, followed by 1,512.5 pts –16 Nov’s low. Towards the upside, the resistance levels are pegged at 1,549 pts or the high of 2 Nov, then 1,556.5 pts or the low of 29 Oct.

Source: RHB Securities Research - 29 Dec 2021