Stay in short positions until a stronger rebound is confirmed. The FKLI ended the latest session positively. It crossed above the above the 1,600-pt round figure at the close after a several attempts over the past two weeks. The intraday tone was encouraging, as the index generally moved higher for the whole session – the low and high were recorded at 1,602.5 pts and 1,610 pts before closing 13 pts higher at 1,609.5 pts. The FKLI’s price actions over the past three weeks or so are still regarded as just a minor rebound within the multi-quarters downtrend, which had resumed from 2 Jul’s high of 1,700 pts. Prospects for a stronger rebound to develop may only improve if the 1,621.5 pts immediate resistance is crossed by the bulls. For now, we stay with our negative trading bias.

As the index’s downtrend is still valid, traders are recommended to stay in short positions. We initiated these at 1,668 pts, or the closing level of 12 Jul. To manage risks, a stop-loss can now be placed above the 1,621.5-pt mark.

The immediate support is set at 1,573 pts, ie the low of 14 May. This is followed by the 1,550-pt mark. Moving up, the immediate resistance is set at 1,621.5 pts, or the high of 9 Aug. This is followed by 1,660.5 pts, ie the high of 24 Jul.

Source: RHB Securities Research - 3 Sept 2019