Maintain long positions. The FKLI September futures contract saw selling pressure heightened, retracing 12.50 pts to settle at 1,576 pts – falling below the 200-day SMA line. The index opened at 1,593 pts yesterday. After briefly touching the day’s high of 1,593.50 pts, it turn southwards and registered the day’s low of 1,572 pts before the close, thereby printing a black body candlestick. The latest session has erased the previous session bullish candlestick. If the selling pressure persists in the immediate session ahead, this will confirm the formation of a bearish reversal pattern and sentiment will become negative again. As long as the trailing-stop remains intact, we maintain a positive trading bias.

We recommend that traders maintain long positions, which were initiated at 1,524 pts or the close of 17 Aug. To mitigate the downside risks, the trailing-stop is fixed at 1,572.50 pts.

The immediate support has been revised to 1,572.50 pts or 26 Aug’s low, followed by 1,550 pts. Meanwhile, the immediate resistance is at 1,600 pts (the psychological level), then 1,610.50 pts or the high of 30 Aug

Source: RHB Securities Research - 1 Sept 2021