Maintain short positons. The FKLI generally trended lower for the entire session, sliding from a high of 1,501.5 pts to a low of 1,487.5 pts, before narrowing its losses 7.5 pts to close at 1,493 pts – slightly above the 200-day SMA line. Technical evidence is building that the past sessions’ price actions around the said SMA line suggest a high possibility of a minor consolidation phase taking place. This comes after the index experienced a price rejection from the 50-day SMA line. Once this consolidation phase is over, to be marked by a decisive breakdown from the 200-day SMA line, the index is likely to retrace further. Maintain our negative trading bias.

We recommend that traders retain their 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 maintained at 1,483.5 pts, the low of 24 Sep. This is followed by 1,476 pts – the low of 29 Jun. On the upside, the immediate resistance is set at 1,500 pts, followed by 1,515 pts

Source: RHB Securities Research - 30 Oct 2020