Maintain short positions. Selling pressure on the FKLI tapered yesterday, which saw the index rising by 5.50 pts to close at 1,525 pts. It opened at 1,516 pts, then dipped to the day’s low of 1,514 pts, before bouncing back to test the day’s high of 1,526 pts before closing. Yesterday, the index printed a white body candlestick which showed that the bullish momentum is gaining traction. As the RSI is turning higher, the index may see a follow-through price action in the immediate session, to test the 1,530-pt resistance. Meanwhile, we believe selling pressure should persist near the 50-day SMA line. As long as the FKLI is trading below the moving average, it still poses a bearish technical set-up. As such, we hold on to a negative trading bias.

Traders should remain in short positions, which were initiated at 1,569.50 pts or the close of 2 Sep. To manage trading risks, the trailing-stop threshold is set at 1,535 pts.

The immediate support has been revised to 1,512 pts or the low of 21 Sep, followed by the 1,500-pt psychological level. Conversely, the nearest resistance is at 1,530 pts, then 1,542.50 pts or the low of 15 Sep.

Source: RHB Securities Research - 22 Sept 2021