KUALA LUMPUR: The FTSE Bursa Malaysia KLCI (FBM KLCI) is expected to attract further buying pressure to test the higher resistance at 1,644 points, according to RHB Investment Bank Bhd (RHB Research).
The firm said this will occur if the index breaks past the 1,630-point resistance level.
"At this juncture, the FBM KLCI is becoming firmer above the 50-day SMA line, strengthening the bullish setup. Pending the bullish breakout, we hold on to the positive trading bias," it said in a note today.
The FBM KLCI resumed the upside movement during Friday's session, climbing 8.50 pts to close stronger at 1,625 points, eyeing to break past the 1,630 point resistance.
On Friday, the index started off trading at 1,619.50 points; it then rose to the 1,630-point resistance level before closing at 1,625 points.
RHB Research said the latest session saw the index printing a fresh "higher high" with "higher low," reaffirming the bullish setup.
On that note, RHB Research advised traders to stay on long positions initiated at 1,565.50 points or the close of Aug 6.
The firm said to mitigate the trading risks, the trailing-stop threshold is introduced at 1,600 points.
"The first support is marked at 1,600 points, followed by 1,570 points.
"On the upside, the nearest resistance is eyed at 1,630 points, followed by 1,644 points, which is the high of July 18," it noted.
Meanwhile, the Crude Palm Oil Futures (FCPO) is resuming the correction after breaching the RM3,700 support to close lower at RM3,681.
The commodity began Friday's session at RM3,688. Initially, it rose to test the RM3,734 session's high.
However, it gave up the intraday gains and closed at RM3,681.
RHB Research said the latest "lower low" closing, coupled with the relative strength index (RSI) rounding downwards, shows the bearish momentum is gaining traction again.
It added that the bears may drag the commodity to test the lower support at RM3,600.
"As mentioned in the previous note, support will be weak in a bearish setup.
"The correction will continue until the commodity is able to chart a bullish reversal candlestick.
"Since the bearish momentum is in play now, we make no change to the negative trading bias," it noted.
The firm said traders should retain the short positions initiated at the close of Aug. 5, which is RM3,787.
To manage the trading risks, it said the stop-loss threshold is set at the RM3,800 level.
"After the bearish breakout, the first support is revised to RM3,600, followed by RM3,500.
"Conversely, the first resistance stays at RM3,800, followed by the RM3,925 mark," it noted.