The FKLI extended its upward movement last Friday, climbing 7 pts and settling stronger at 1,603 pts. it closed above the 1,600-pt psychological threshold. The index initially started off the session at 1,596.50 pts.
After setting its session low at 1,593.50 pts, it marched higher and touched the 1,608.50-pt session high before the close. The latest price action shows sentiment remains positive despite facing mild selling pressure, RHB Research said.
If the momentum continues, the FKLI may scale higher towards the YTD high of 1,620 pts. Breaching the resistance will attract buying pressure to lift the index higher, possibly testing 1,634.50 pts.
Meanwhile, RHB Research said if the index resorts to profit-taking activities, the FKLI may retreat towards the 50-day SMA line or re-test the 1,566.50-pt support.
If it continues to stay above the 50-day SMA line, we think the bullish structure will remain. Hence, we stick to our positive trading bias. Traders are recommended to retain the long positions initiated at 1,567.50 pts or the closing level of 16 Mar.
To manage the trading risks, the initial stop-loss threshold is placed at 1,566.50 pts. The immediate support remains at 1,593.50 pts – 17 Mar’s high – and followed by 1,566.50 pts, ie the low of 24 Feb. The first resistance is pegged at 1,620 pts and followed by 1,634.50 pts, which was the high of 12 Mar 2021
