Maintain long positions, as the rebound may still be incomplete. The FKLI underwent a sharp negative intraday price reversal to close 19.5 pts lower at 1,509.5 pts. Earlier yesterday, it hit a high of 1,538 pts. Consequently, a “Bearish Harami” formation appeared. We regard this negative performance as a possible sign of profit-taking, after the sharp rebound registered in the prior three sessions. We believe index’s rebound, which started from an area near 29 Jun’s low of 1,476 pts, is still incomplete – and that it could still be extended. This is more so as the index is still holding above the 200-day SMA line. As such, we maintain a positive trading bias

We continue to advocate that traders remain in long positions. We initiated these at 1,529 pts – the closing level of 15 Sep. To manage risks, a stop-loss can be set below 1,498.5 pts.

The immediate support is revised to 1,498.5 pts, the low of 15 Sep, followed by 1,487 pts – the price point of 11 Sep. Towards the upside, the immediate resistance is eyed at 1,518 pts – derived from the latest candle. This is followed by 1,538 pts, the index’s latest high.

Source: RHB Securities Research - 18 Sept 2020