Maintain short positions. The FKLI failed to stage a meaningful rebound yesterday, closing 1.5 pts lower at 1,513 pts. The index opened at 1,514.50 pts and, tracking its regional peers’ bullish sentiment, rose to the day’s high of 1,519 pts. However, the positive momentum was short-lived and it fell to 1,511.50 pts (the day’s low) before closing. From the recent four sessions, the index has been printing “lower highs”, indicating that the bears are stronger than the bulls. With the RSI staying below the 50% threshold, the index needs to undergo a further consolidation before it can retest the 1,525-pt resistance. As the negative momentum is growing, we make no change to our negative trading bias.

Traders should stick to short positions, which where initiated 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 is at the 1,500-pt psychological level, followed by 1,449 pts – the low of Nov 2020. Meanwhile, the immediate resistance is pegged at 1,525 pts or 9 Jul’s high, followed by 1,550 pts.

Source: RHB Securities Research - 30 Jul 2021