Maintain short positions as the bulls are still not able to stand firmly above the 1,600-pt mark. The FKLI ended the latest session marginally higher by 0.5 pt to close at 1,600.5 pts. The low and high were recorded at 1,594 pts and 1,601.5 pts. The index has been experiencing a minor rebound over the past week or so, and attempting to stage a firm breakout from the 1,600-pt round figure over the latest two sessions – after it came in near to test the 1,573-pt immediate support level on 15 Aug. Towards the upside, a stronger rebound may only develop if the 1,621.5-pt immediate resistance is overcome by the bulls. Stay with our negative trading bias.

As the said rebound is still regarded as a minor one, traders are advised to remain in short positions. We initiated these at 1,668 pts, the closing level of 12 Jul. To manage risks, a stop-loss can now be placed above the 1,621.5-pt mark.

Towards the downside, the immediate support is expected at 1,573 pts, ie the low of 14 May. This is followed by the 1,550-pt mark. Meanwhile, the immediate resistance is set at 1,621.5 pts, the high of 9 Aug. This is followed by 1,660.5 pts, the high of 24 Jul.

Source: RHB Securities Research - 26 Aug 2019