Pending the signal of a stronger rebound, maintain short positions. The FKLI advanced 6 pts to close at 1,594 pts yesterday, after hitting a low and high of 1,589 pts and 1,595 pts. Overall, the index’s past three weeks’ price actions still point towards a relatively narrow sideways consolidation above the immediate support of 1,573 pts. For the bulls to signal a stronger rebound phase is taking place, the 1,600-pt round figure has to be crossed. Until this happens, the index’s weak trend is still firmly in place. We maintain our negative trading bias.

Until the bulls show that they are regaining control over the market, 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 1,600-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, we maintain the immediate resistance target 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 - 12 Sept 2019