Maintain short positions. The FKLI saw neutral momentum yesterday, adding 0.5 pts to close at 1,514.50 pts. The index started Wednesday’s session flat at 1,513.50 pts. After oscillating between the day’s high and low of 1,517.50 pts and 1,510 pts, it settled at 1,514.50 pts – forming a doji pattern. Coupled with the RSI staying below the 50% threshold, expect the neutral momentum to prevail in the coming sessions. The index will likely be moving sideways between the consolidation zone of 1,525 pts and 1,500 pts. As long as the immediate resistance remains intact, we keep to our negative trading bias.

We recommend traders to keep their short positions. We initiated these at 1,569.50 pts, or 11 Jun’s close. To manage trading risks, a trailing-stop is set at the nearest resistance level of 1,525 pts.

The immediate support level remains at 1,500 pts or the psychological level, followed by 1,449 pts – the low of Nov 2020. Conversely, the immediate resistance level pegged at 1,525 pts or 9 Jul’s high, followed by 1,550 pts (26 Feb’s low).

Source: RHB Securities Research - 29 Jul 2021