No end to the weak bias; stay short. The FKLI formed a black candle yesterday, dropping 25.5 pts to close at 1,586.5 pts. The trading tone was negative as the index generally moved lower for the entire session, while the high and low were posted at 1,603 pts and 1,586 pts. All in, its downtrend is still firmly in place. Price actions in the coming sessions will be important, as the index is nearing the immediate support of 1,573 pts on an oversold Daily RSI reading. Until there are indications of a rebound from the said immediate support area, we maintain our negative trading bias.

As the retracement leg is still firmly developing, we continue to recommend that traders remain in short positions. We initiated these at 1,668 pts, or the closing level of 12 Jul. To manage risks, a stop-loss can be placed above the 1,660.5-pt mark.

We are keeping the immediate support at 1,573 pts, ie the low of 14 May. This is followed by the 1,550-pt mark. Moving up, the immediate resistance now set at 1,600-pt mark, a round figure. This is followed by 1,660.5 pts, the high of 24 Jul.

Source: RHB Securities Research - 14 Aug 2019