Maintain short positions. The FKLI rebounded from an intraday low of 1,492 pts to finish the session 9 pts weaker at 1,506.5 pts – marginally above the 200-day SMA line. While the index managed to rebound over the previous two sessions, there is still a lack of positive follow-through suggesting the retracement phase that started from the endJuly’s “Double Top” formation has not reached an interim low. Hence, 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 placed above 1,520 pts.

The immediate support is maintained at 1,500 pts, this is followed by 1,480 pts – 14 Sep’s low. Meanwhile, the resistance points are maintained at 1,520 pts and 1,544.5 pts – derived from 3 Sep’s candle.

Source: RHB Securities Research - 9 Sept 2020