Maintain long positions. The FKLI struggled to climb higher yesterday as sharp intraday profit-taking took place – it closed 2 pts weaker at 1,605 pts. The benchmark index started the night session at 1,606.50 pts. During the morning session, strong buying interest lifted the FKLI to the day’s high of 1,620 pts, albeit shortlived. Selling momentum quickly kicked in to drag the index towards the day’s low of 1,600.50 pts before rebounding mildly at the close. With the latest “doji” neutral candlestick with long upper shadow, the selling pressure below 1,620 pts is expected to remain in the coming sessions. The neutral candlestick for two consecutive sessions also suggests the FKLI will oscillate between the 1,620-pt resistance and 1,597-pt support in the coming sessions. Since the trailing-stop level has yet to be breached, we maintain our positive trading bias.

We recommend traders stick to the long positions initiated at 1,527.50 pts or the close of 3 Feb. To manage the downside risks, the trailing-stop threshold is revised higher to 1,581.50 pts.

The immediate support is revised to 1,597 pts – 16 Feb’s low – and followed by 1,581.50 pts, ie 15 Feb’s low. Towards the upside, the first resistance is revised to 1,620 pts – 16 Feb’s high – and then 1,650 pts.

Source: RHB Securities Research - 18 Feb 2022