Maintain short positions. FKLI tried to stage a rebound in early in yesterday’s session, but ended lower after uninspiring trade. The index opened with a 3-pt gap-up at 1,468 pts, briefly traded at the day’s high of 1,470.5 pts, then retraced to close at 1,459.5 pts, which was close to the day’s low. The latest price action showed that the market is still in a risk-off mode. Investor sentiment may change, if the index rebounds above the resistance level. With the RSI being below the 50% threshold, we think that sentiment on the FKLI will remain lacklustre for the near term. 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 is placed above 1,500 pts. 

The immediate support is revised to 1,449 pts – the latest low, followed by 1,442.5 pts – the low of 29 May. On the upside, the immediate resistance is set at 1,477 pts – the low of 10 Sep, followed by 1,500 pts.

Source: RHB Securities Research - 3 Nov 2020