Keep to short position as the negative bias is still developing. Yesterday saw the FKLI formed a black candle as it moved progressively lower throughout the session – with a high and low registered at 1,741 pts and 1,711 pts, before closing at 1,718 pts, implying a 14-pt loss. The weak session continued to signal the index’s retracement, which set in after the failed attempt to break above the 200-day SMA line on 7 Jun, remains in development. We maintain this retracement may, at the minimum, retest the 1,700 pts immediate support mark. On this, we keep to our near-term negative trading bias.

We continue to recommend traders to keep to short positions, initiated at 1,732 pts, which is the closing level of 18 June. To manage risks, investors can set the stop-loss at 1,763 pts.

The immediate support is set at 1,700-pt mark, the round figure. The following support is at 1,661 pts, which is the low of 19 Jan 2017. Towards the upside, the immediate resistance is now set at 1,735 pts, the low of 4 Jun. The following resistance is expected at 1,800, which is a round figure, also near the high of 6 Jun (1,797 pts).

Source: RHB Securities Research - 20 Jun 2018