Maintain short positions. The FKLI ceased the latest session 9 pts lower at 1,568.5 pts, after testing the immediate support of 1,564 pts with a low of 1,560 pts. The weak session indicated no positive price follow-through for the prior session’s “Hammer” formation. As such, the retracement that started from the the recent failed attempt to cross the 1,621.5 pts resistance is still firmly in place. We are keeping our negative trading bias.

As the bears are still in control over the index’s retracement phase, we continue to recommend that traders remain in short positions. We initiated these at 1,569.5 pts, the closing level of 3 Aug. To manage risks, a stop-loss can be placed above 1,615 pts.

We are keeping the immediate support target at 1,564 pts, the low of 16 Jul. This is followed by 1,547 pts, which is the 4 Aug’s low. Towards the upside, the immediate resistance is at 1,580 pts, followed by 1,600 pts

Source: RHB Securities Research - 6 Aug 2020