Negative bias still not showing signs of waning; maintain short positions. The FKLI ceased the latest session negatively. It closed 7.5 pts lower at 1,582 pts. The intraday trading tone was negative as the index generally moved lower throughout the session, with the high and low posted at 1,592 pts and 1,582 pts. The weak session meant the 4 Sep’s “Bullish Harami” formation is still not confirmed. This implies that prospects for the index to stage a stronger rebound are still low. Towards the upside, a firm breach of the 1,600-pt level is needed to confirm the “Bullish Harami’ formation. Until this happens, we stick with our negative trading bias. As the bears remain in control over the price trend, 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 target 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 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 - 24 Sept 2019