Maintain short positions. The FKLI settled 8 pts higher at 1,572.5 pts after it retested the 50-day SMA line with a low of 1,560 pts. Despite being under pressure over recent sessions, the index continued to hold above the said SMA line – indicating a relatively strong support. Based on this observation, we now believe should the index be able to cross above the 1,577.5-pt immediate resistance in the coming sessions, this will likely signal the resumption of its upward move. Pending this, we are keeping our negative trading bias.

Traders should 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 1,577.5 pts.

We revised the immediate support to 1,565 pts – derived from the latest session. This is followed by 1,555 pts, the price point of 15 Aug. Conversely, the immediate resistance is maintained at 1,577.5 pts, the high of 13 Aug. This is followed by 1,585 pts, a point near 7 Aug’s high.

Source: RHB Securities Research - 19 Aug 2020