Maintain short positions. The FKLI briefly tested the 1,515-pt resistance yesterday, before being dropping to close at 1,509 pts – indicating a mere 0.5-pt increase. As previously mentioned, an upside breach of the resistance would likely signal an extension of the index’s rebound, which started after 11 Sep’s “Bullish Engulfing” formation. This appeared at the crucial support level of 1,476 pts, the low prior to the index’s last surge between end-June and mid-July. For now, we are maintaining a negative trading bias.

We advise traders to remain in short positions. We initiated these at 1,491 pts, the closing level of 21 Sep. To manage risks, a stop-loss can be set above 1,515 pts.

The immediate support is maintained at 1,497 pts, followed by 1,483.5 pts, the low of 24 Sep. Conversely, the resistance points are set at 1,515 pts and 1,525 pts.

Source: RHB Securities Research - 29 Sept 2020