Maintain short positions until the rebound is confirmed. The FKLI significantly narrowed its losses yesterday, rebounding from a low of 1,449 pts to close at 1,465 pts – indicating a mere 2.5-pt drop. However, the sharp intraday rebound was still not enough to signal that the index’s retracement phase has reached an interim low. Additionally, the index is still trading relatively well below the 50- and 200-day SMA lines – of which both are also curving downward. On top of that, its RSI has yet to signal an oversold condition. We maintain our negative trading bias.

We recommend that traders remain in 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 1,500 pts

We are keeping the support levels at 1,456 pts, followed by 1,442.5 pts – the low of 29 May. Meanwhile, the immediate resistance is pegged at 1,476 pts – the low of 29 Jun, followed by 1,500 pts.

Source: RHB Securities Research - 3 Nov 2020