Maintain short positions. Selling pressure on the FKLI tapered off yesterday, and it rebounded 6 pts to close at 1,518 pts. The index opened 1,514 pts, then whipsawed between a high and low of 1,519.50 pts and 1,1512.50 before closing. Over the past four sessions, the index has printed a “higher low” pattern, indicating that sellers may be exhausted. As such, the index may start consolidating above 1,500 pts. In the event that it breaches 1,525 pts, the bulls may stage a technical rebound to test a higher hurdle. As long as the index stays below the 1,550-pt resistance, the downtrend should remain intact. We remain a bearish trading bias.

Traders should keep to short positions. We initiated these at 1,569.50 pts, or 11 Jun’s closing. To mitigate trading risks, the trailing-stop is placed at 1,550.00 pts.

The immediate support level is marked at 1,500 pts, followed by 1,449 pts or the lowest level charted in Nov 2020. Conversely, the immediate resistance level is at 1,525.00 pts (9 Jul’s high), then 1,550.00 pts or 26 Feb’s low

Source: RHB Securities Research - 14 Jul 2021