Maintain short positions. The FKLI gained 17.5 pts to settle at 1,508.5 pts – the high was posted at 1,513 pts. The positive closing places the index slightly above the 200-day SMA line. We treat this as a possible minor pause by the bears following the index’s prior three sessions’ declines. To recap, we believe the index’s counter-trend rebound following the emergence of the “Bullish Engulfing’ formation on 11 Sep was completed with the high of 1,538 pts on 17 Sep. As such, chances are high the retracement that started from 14 Jul’s “Double Top” formation has resumed. Maintain our negative trading bias.

We advise traders to stay in short positions. We initiated these at 1,491 pts, which is the closing level of 21 Sep. To manage risks, a stop-loss can be set above 1,525 pts.

The immediate support is revised to 1,500 pts, followed by 1,490.5 pts – the low of 21 Sep. Moving up, the immediate resistance is set at 1,515 pts, followed by 1,525 pts – the high of 18 Sep

Source: RHB Securities Research - 23 Sept 2020