Maintain short positions as the downside risk is still high. The FKLI closed 10.5 pts weaker last Friday, at 1,485 pts – marginally above the 1,484-pt immediate support. If the immediate support is breached, this would be another negative signal, as it will confirm the downside breach from the multi-week uptrend line. As it is, the negative technical picture is reinforced by the fact that the index is trading relatively well below the 1,500-pt mark, a previous support-turnedresistance. We 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 now be set above 1,515 pts.

The immediate support remains at 1,484 pts, the low of 15 Jun. This is followed by 1,466 pts, the high of 29 May. Conversely, the immediate resistance is set at the 1,500-pt mark. This is followed by 1,515 pts (slightly above the 200- day SMA line).

Source: RHB Securities Research - 29 Jun 2020