Maintain short positions, as the rebound is still in a counter-trend. The FKLI traded within a relatively wide range of 1,508 pts and 1,526 pts yesterday, before closing 1 pt higher at 1,519.5 pts. This indicates that bulls and bears have been in conflict around the 200-day SMA line. Yesterday’s close did not produce any clear winner, but the index did close slightly above the SMA line. We believe this just means that a minor rebound is taking place, after the recent sharp decline. As such, we are maintaining our negative trading bias.

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

The immediate support is maintained at 1,500-pt mark. This is followed by 1,484 pts, the low of 15 Jun. Moving up, the immediate resistance is eyed at 1,545 pts, derived from 12 Jun’s candle, followed by 1,565 pts, which is the price point of 11 Jun.

Source: RHB Securities Research - 18 Jun 2020