Maintain short positions while waiting for price reversal confirmation. The FKLI ended the latest session higher by 3 pts at 1,563 pts. The low and high were posted at 1,559 pts and 1,567.5 pts. The positive session came after the index tested the 1,547.5-pt immediate support in the previous two sessions. However, it was still insufficient to confirm that the index recent weeks’ correction had reached an end. We are of the view that the trailing stop for our ongoing short positions of 1,564 pts has to be crossed at the closing to confirm the prospect for a price reversal. Until this happens, we keep to our negative trading bias.

Pending further positive price actions in the coming sessions, we recommend traders to stay in short positions. We initiated these at 1,564 pts, the closing level of 29 Nov. To manage risks, a stop-loss can now be placed at the breakeven level.

The immediate support is pegged at 1,547.5 pts, the low of 10 Oct, followed by 1,500-pt level. Moving up, the immediate resistance is eyed at 1,588.5 pts, the high of 29 Nov. This is followed by 1,621.5 pts, the high of 9 Aug.

Source: RHB Securities Research - 6 Dec 2019