Maintain short positons. The FKLI experienced a positive intraday price reversal in the latest session, it rebounded from a low of 1,484.5 pts to end 2 pts higher at 1,495 pts. The index has been showing signs of attempting to reverse its retracement phase over the latest three sessions, with a clear objective of adverting a clean breakdown from the 200-day SMA line. However, so far the said attempts are still relatively weak as the index is still not able to move decisively above the said SMA line. As such, from the price trend perspective, we still believe the risk remains tilted towards the downside. Hence, we are keeping our negative trading bias.

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 now be placed above 1,530 pts.

The immediate support is kept at 1,483.5 pts, the low of 24 Sep. This is followed by 1,476 pts – the low of 29 Jun. Moving up, the immediate resistance is set at 1,500 pts, followed by 1,515 pts

Source: RHB Securities Research - 27 Oct 2020