Maintain short positions as the retracement is extending. The FKLI ended its latest session 13 pts weaker at 1,544 pts. The negative session suggests the correction, which started from end-July’s “Double Top” formation, is still firmly in place. Based on the latest performance, provided the index is still capped by the said SMA line, the risk of further retracement should remain high. In addition, the RSI is still capped by the resistance line. We maintain 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 is now set at the breakeven mark.

The immediate support is maintained at 1,543.5 pts, or the low of 27 Aug. This is followed by 1,536 pts, the low of 26 Aug. Resistance points are set at 1,560 pts and 1,574 pts.

Source: RHB Securities Research - 1 Sept 2020