Pending confirmation for price reversal formation; maintain short positions. The FKLI staged a positive intraday price reversal to end the latest trade 16 pts higher at 1,503.5 pts – it had earlier reached 1,477.5 pts. Consequently, a “Bullish Engulfing” formation appeared near the important support zone of 1,480 pts-1,476 pts. The support zone has been tested over the latest two sessions. Should there be further positive price follow-through in the coming sessions, this would confirm the said price reversal formation, which could pave the road for a stronger rebound phase to develop. Until we see this happens, 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.

We revised the immediate support to 1,490 pts, this is followed by the support zone of 1,480 pts and 1,476 pts. Meanwhile, the resistance points are now eyed at 1,520 pts and 1,540 pts.

Source: RHB Securities Research - 14 Sept 2020