Maintain short positions. The FKLI bears took a breather yesterday, as the index rose 7 pts to settle at 1,484 pts. The benchmark index initially began at 1,476 pts. After touching the session’s low of 1,474-pt, strong buying momentum emerged to lift it higher, touching the session’s high of 1,488.50 pts before the close. Although the index managed to rebound from the interim low of 1,471 pts, the upside movement may face strong selling pressure near the 1,500-pt level. Breaching the psychological level would see the index form a new “higher high” bullish pattern. Before that happens, we stick to a negative trading bias until the stop-loss is breached.

Traders are advised to hold on the short positions initiated at 1,496.50 pts – the close of 1 Dec. To mitigate the trading risks, the stop-loss is set at 1,517 pts.

The immediate support is changed to 1,471 pts – 15 Dec’s low – and followed by 1,465 pts. On the upside, the nearest resistance remains at 1,500 pts, and is followed by the higher resistance of 1,512.50 pts, or the high of 1 Dec.

Source: RHB Securities Research - 17 Dec 2021