Maintain short positions as there are no reversal signals. The FKLI’s latest trading was uneventful as trading took place in a range of between 1,587.5 pts and 1,593 pts, before ending flat at 1,589.5 pts. The latest performance can be seen as part of the index’s narrow sideways move, which has been in development over the past month, above the 1,573-pt immediate support level. We are still of the view that, as long as the index is capped by the 1,600-pt level and the 4 Sep’s “Bullish Harami” unconfirmed, the possibility for a stronger rebound to develop is still low. Maintain our negative trading bias. With no signals to indicate that the weak trend has reached an inflection point, 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. The immediate support is set at 1,573 pts, ie the low of 14 May. This is followed by the 1,550-pt mark. On the other hand, the immediate resistance is eyed at 1,621.5 pts, or the high of 9 Aug. This is followed by the 1,660.5-pt mark, ie the high of 24 Jul.

Source: RHB Securities Research - 23 Sept 2019