Maintain short positions. The FKLI attempted to cross the 1,577.5-pt immediate resistance for the second consecutive session, charting a high of 1,581 pts before it slid back to settle 2.5 pts softer at 1,572 pts. While the index has been able to stage a minor rebound off the 50-day SMA line, as long as it is still unable to settle above the immediate resistance, prospects of its multi-month uptrend resuming remain limited. As such, we maintain a negative trading bias.

Traders are adised to 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.

The immediate support is maintained at 1,565 pts, derived from the 18 Aug candle. This is followed by 1,555 pts, the price point of 15 Aug. Meanwhile, 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 - 24 Aug 2020