RHB Retail Research

FKLI - Pressure At The Support Zone

rhboskres
Publish date: Mon, 22 Jun 2020, 09:23 AM
rhboskres
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RHB Retail Research

Maintain short positions as there is no clear reversal signal from the support zone. The FKLI continued to experience downward pressure in the latest trade. At one point, it hit a low of 1,493 pts before rebounding to close at 1,503.5 pts – a 5-pt drop. The index has not been able to exhibit a strong signal to reverse its retracement leg from around the support zone of 1,500-1,515 pts over recent sessions. Should this zone be breached, a deeper correction could potentially develop. All in, we continue believe that the index is still at the early stages of correcting its upward move between mid-Mar and early-Jun. Maintain 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 now eyed at 1,515-pts (near the 200-day SMA line). This is followed by 1,545 pts, derived from 12 Jun’s candle.

Source: RHB Securities Research - 22 Jun 2020

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