Maintain short positions. The FKLI has attempted to stage a technical rebound, rising 4 pts to settle at 1,570.50 pts. The index started off at 1,567 pts before swinging between 1,576 pts and 1,566 pts – it then settled at 1,570.50 pts. Although it formed a “higher low” during its latest session, the momentum was still not strong enough to negate the previous bearish session. On a larger timeframe, the FKLI was still capped within a “lower highs” bearish pattern since retracing from 1,610.50 pts on 30 Aug. If the latest buying interest extends and breaches the 1,584.50-pt immediate resistance, the index may return to an upward trajectory. Otherwise, we expect selling pressure to persist with downside risks. Hence, we are keeping our negative trading bias until the stop-loss mark is breached.

We recommend traders retain the short positions initiated at 1,569.50 pts, or the close of 2 Sep. To mitigate the trading risks, the stop-loss threshold is fixed at 1,587 pts.

The immediate support remains at 1,550 pts. This is followed by the lower support at 1,530 pts. On the upside, the first resistance is seen at 1,584.50 pts – the high of 2 Sep – and followed by the 1,600-pt psychological level.

Source: RHB Securities Research - 7 Sept 2021