Maintain short positons. The FKLI recorded a low and high of 1,511.5 pts and 1,530.5 pts, before closing 18 pts higher at 1,528 pts. While the positive performance again places the index above the 1,500-1,515pts zone, the FKLI remains capped by the 50-day SMA line. At this juncture, we regard this as a minor rebound following the prior session’s sharp decline, and the index has yet to cancel the negative bias following the price rejection from the 50-day SMA line. All in, the bias for the index to undergo a further retracement remains intact.

We recommend that traders stick to short positons. We initiated these at 1,510 pts, the closing level of 12 Oct. To manage risks, a stop-loss can be placed above 1,540 pts.

The immediate support is now pegged at 1,515 pts, followed by 1,500 pts. Conversely, the immediate resistance is now eyed at 1,540 pts, followed by 1,560 pts.

Source: RHB Securities Research - 14 Oct 2020