Maintain short positions. Yesterday, the FKLI bounced off its immediate support and closed 3.5 pts higher at 1,570.50 pts – which was still below the 200-day SMA line. Initially, it opened on Tuesday with a gap-up, at 1,572 pts. It then oscillated between 1,568 pts and 1,575.5 pts until the close. Selling pressure eased yesterday, as the lower shadow did not breach the previous candlestick’s low to mark a fresh “lower low”. Nevertheless, the RSI indicator remains below the 50% threshold, so the downward pressure on the index remains intact – if the negative momentum accelerates, the index may break below the 1,564.50-pt mark of the immediate support level. As of now, the 200-day SMA line will act as a resistance threshold, and we will maintain a bearish trading bias.

We recommend that traders maintain short positions. We initiated these at 1,569.50 pts, or the close of 11 Jun. To mitigate risks, the stop-loss is pegged above 1,592 pts.

The support levels are still at 1,564.50 pts, which was 25 May’s low, and 1,545.5 pts – the low of 21 May. Towards the upside, the resistance levels are unchanged, at 1,584.50 pts, which was 18 Jun’s high. This is followed by 1,591.50 pts, or the high of 8 Jun.

Source: RHB Securities Research - 22 Jun 2021