The FKLI underwent profit-taking near the resistance and pulled back 1.50 points to settle at 1,606.50 points, RHB Research said.
On Monday, the index gapped up on positive sentiment, opening at 1,610 points and rising to the day’s high of 1,616 points. After the strong opening, the index then faced selling pressure throughout the session, retreating to the day’s low of 1,604 points before the close.
Even though the index closed below the opening price, the low was higher than the previous session’s low – pointing to mild selling pressure. It may consolidate sideways near the 1,608.50-point resistance.
Post consolidation, RHB said that it thinks the index will resume the upside movement and head towards the 1,620-point resistance. If profit-taking activities are extended, strong support should emerge near the 1,586.50-point level. At this stage, RHB said that it maintains a positive trading bias.
We advise traders to remain in the long positions initiated at 1,567.50 points, or the close of 16 March. To mitigate the downside risks, the trailing stop is placed at 1575.50 points.
The first support is marked at 1,586.50 points (6 Apr’s low), followed by 1,575.50 points. Conversely, the immediate resistance stays at 1,608.50 points (25 Mar’s high), followed by 1,620 pts or the YTD high charted on 16 Feb
