Bears are pushing ahead; maintain short positions. The FKLI experienced a sharp retracement in the latest session, ending 46.5 pts lower at 1,495 pts – the low was posted at 1,484 pts. The closing level effectively placed the index below the previous support zone, which was made up of 1,500 pts (the previous multi-year double-top support) and 1,515 pts (near the 200-day SMA line). The breakdown from this zone signals that the bears are in a firm control over the index’s retracement phase. In the absence of a price reversal signal to mark an interim low, we are keeping to our negative trading bias.

We advise traders to stay in short positons. We initiated these at 1,548.5 pts – the closing level of 11 Jun. To manage risks, a stop-loss can now be placed above 1,560-pts.

The immediate support is revised to 1,484 pts – the latest low. This is followed by 1,476.5 pts – the low of 2 Jun. Meanwhile the immediate resistance is now pegged at 1,514 pts, followed by 1,545 pts – both are derived from 12 Jun’s candle

Source: RHB Securities Research - 16 Jun 2020