Maintain long positions. The FKLI saw mild profit-taking in the first trading session of 2022. The benchmark index formed a bearish candlestick near the 200-day SMA line after closing at 1,551.50 pts. It opened at 1,555 pts and rose towards the session’s high of 1,561 pts in the morning, then retraced in the afternoon to print the session’s low of 1,550 pts before the close. Although selling pressure emerged near the 200-day SMA line, the index managed to stay above the 1,531-pt support level. For the immediate term, the index may undergo a sideways consolidation – but the positive momentum that lifted the index above 50-day SMA line should still be valid. As such, we maintain a positive trading bias until the stop-loss is breached.

Traders should stick to the long positions initiated at 1,500.50 pts, ie the close of 22 Dec. As the buffer against downside risks, the stop-loss has been set at 1,531 pts.

The immediate support remains at 1,531 pts – 29 Dec’s low – followed by 1,512.50 pts or the high of 23 Dec. Conversely, the nearest resistance is pegged at 1,560 pts, then 1,590 pts.

Source: RHB Securities Research - 3 Jan 2022