The FKLI extended its upside movement for the third consecutive session, jumping 16 points on Friday to close at 1,466.50 points – breaching the previous resistance of 1,462 points on the back of strong momentum, RHB Research said.
It initially opened at 1,450.50 pts. After setting a foothold at the day’s low of 1,448 points, it climbed to the session’s high of 1,469.50 points before closing. The latest bullish session showed that the bulls are in control and are looking to cross above the 50-day SMA line.
If it manages to do this, it will then test the Bearish Breakaway Gap, which was charted on 13 Jun. As the index is now trading at July’s high, there may be profit-taking activity in the coming sessions. If this happens, we expect the 1,448-point and 1,436-points levels to provide support.
As the RSI is above the 50% threshold, suggesting positive momentum is still in play, we retain our bullish bias. We recommend traders maintain the long positions initiated at 1,450.50 points or the closing level of 21 Jul.
To minimise trading risks, the stop-loss is revised to 1,436 points from 1,415 points. The immediate support has been changed to 1,448 points – 22 Jul’s low – followed by 1,436 points or the low of 4 Jul. On the upside, the first resistance is pegged at 1,480 points – 13 Jun’s high – then 1,488 pts, which was the low of 10 Jun
