Stop-loss triggered; initiate long positions. The FKLI reclaimed the 50-day SMA line yesterday as it bounced off strongly to settle 20 pts higher at 1,567.50 pts – surpassing the immediate resistance of 1,566.50 pts. Yesterday, it opened at 1,549 pts and immediately propelled higher, hitting the session’s high of 1,568 pts before the close. The latest price action that led to a “higher high” together with a “higher low” pattern indicates the recent rebound, which started from 1,518 pts, is expected to continue further above the 1,566.50-pt resistance and the 50-day average line. As the RSI is moving upwards above the 50% level – indicating that the transition from bears to bulls has just begun, and also breaching the stop-loss point – RHB shifts to a positive trading bias.
Maintain short positions. The FCPO’s June contract yesterday began lower but bounced off strongly to close MYR65
higher at MYR6,067 – above the 50-day average line. The commodity opened lower near the 50-day average line at
MYR5,724 and merely touched the day’s low of MYR5,702 before propelling higher. It then climbed strongly towards
the day’s high of MYR6,081 before the close. The latest action shows that buying pressure has emerged above the 50-
day SMA line, which resulted in the MYR5,750 level acting as the strong support. Since the bulls staged a strong
rebound above that support and the average line, the FCPO may test the resistance level of MYR6,200 in the coming
sessions. Nevertheless, as the “higher high” bullish pattern has yet to be printed, RHB expects the bears to remain in control
in the medium term. Until the stop-loss is triggered, it sticks to a negative trading bias.
The Research House recommends that traders maintain the short positions initiated at MYR6,361, or the close of 14 Mar. To minimise the trading risks, the stop-loss is set at MYR6,500. The immediate support is still at MYR5,750, followed by MYR5,550. Also, the immediate resistance is fixed at MYR6,200, then MYR6,500.
Pertama Digital may climb higher as it attempted to move past the sideways consolidation phase of MYR0.875 on Tuesday,
and printed a positive momentum yesterday. If it pushes above that level – forming a “higher high” bullish pattern – the bulls may bring the stock towards the resistance level of MYR0.925, followed by MYR1.00. However, the momentum may lose steam if it falls below the MYR0.815 support, printing a “lower low” bearish structure.
Alliance Bank Malaysia is set to continue its uptrend reversal pattern, as it breached the immediate resistance of MYR3.45 –
registering a “higher high” bullish pattern. The bullish momentum above that level may see the stock climbing towards
the next resistance level of MYR3.75, followed by the MYR4.00 threshold. In the event that it falls below the support of MYR3.33, the positive momentum may fade away, dropping below the 21-day average line.
Ajiya is poised to rebound higher towards its all-time high as it bounced off the 21-day average line, while heading towards the immediate resistance of MYR1.19. If it manages to surpass that level, the stock may propel further towards the all-time high of MYR1.25, before exceeding that and notching a new peak of MYR1.30. Conversely, falling below the MYR1.09 support
should trigger selling pressure, printing a “lower low” bearish pattern.
Ekovest is set for a counter-trend rebound after it breached the immediate resistance of MYR0.42 yesterday – printing a
“White Marubozu” bullish candlestick. If it remains above that level – which is also above the 21-day average line – the stock
is expected to propel towards the resistance point of MYR0.455, then MYR0.47. Conversely, falling below the immediate support of MYR0.405 may trigger the resumption of a downward correction beneath the average line.
RHB Research- Joseph Chai and Al Emri Izzat Shah bin Albakri
