No reversal signal from the bulls yet; maintain short positions. The FKLI underwent an intraday reversal in the latest session, after briefly testing the immediate support of 1,550 pts. At the closing, it settled higher by just 0.5 pts, at 1,557.5 pts. The low and high were posted at 1,548.5 pts and 1,558 pts. The latest performance implies that 4 Oct’s “Doji” formation has been invalidated. This implies that the index’s weak bias, which resumed after the failed attempt to cross the 1,700-pt level on 2 Jul, is still not showing any sign of ending yet – despite the latest intraday positive price reversal. We maintain our negative trading bias.

As the bears are still not showing signs of exhaustion, traders are recommended 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 be placed above the 1,566.5-pt level.

We are keeping the immediate support target at the 1,550-pt mark. Breaking this may see the market to test 1,500 pts. Towards the upside, the immediate resistance should emerge at the 1,600-pt level, followed by 1,621.5 pts, the high of 9 Aug.

Source: RHB Securities Research - 10 Oct 2019