Maintain short positions. The FKLI failed to sustain its earlier session’s positive tone, and slid from a high of 1,585.5 pts to a low of 1,570.5 pts, before closing 5.5 pts weaker at 1,578.5 pts. The index has shown signs of developing a minor rebound over the past sessions, following a recent re-testing of the 50-day SMA line. However, if it is still capped by the 1,585-pt resistance, the prospects of a stronger rebound taking place would be weak. As such, we are maintaining our negative trading bias.

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 now be set above 1,585 pts.

The immediate support is still at 1,564 pts, the low of 16 Jul. This is followed by 1,547 pts, 4 Aug’s low. Moving up, the immediate resistance is set at 1,585 pts, followed by 1,600 pts.

Source: RHB Securities Research - 10 Aug 2020