Maintain short positions on minor rebound. The FKLI staged a positive intraday price reversal in the latest trade, following its 2.5% decline from the prior session’s high, to settle 11 pts at 1,676.5 pts – the low was posted at 1,654 pts. We see this positive performance merely as counter-trend in nature, and that the bigger trend ie further price retracement is still very much intact. We are expecting this correction phase to last for weeks following its recent months’ sharp gains, which we think has reached its interim top at around the 1,700-pt level. Towards the downside, we are setting the minimum retracement target at 1,621,5 pts – being July’s “Double Top” high. Maintain our negative trading bias.

We recommend traders to stay in short positons. We initiated these at 1,665.5 pts – the closing level of 14 Dec. To manage risks, a stop-loss can be set above 1,700 pts.

We revise the immediate support level to 1,654 pts, the latest low. This is followed by 1,640 pts. Conversely, the immediate resistance is now set at 1,700 pts, followed by 1,725 pts.

Source: RHB Securities Research - 16 Dec 2020