Maintain short positions, while tightening up the trailing-stop. The FKLI closed on a softer note yesterday, as it drifted lower throughout the session and, at the closing, came close to testing the 1,700-pt immediate support mark, which is also our minimum retracement target. The session’s low and high were 1,702 pts and 1,730.5 pts respectively, before ending 15 pts lower at 1,703. The weak session was an indication that the retracement – which started after the failed attempt to break above the 200-day SMA line on 7 Jun – is still in effect. Hence, we keep to our near-term negative trading bias.

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

We maintain the immediate support at the 1,700-pt mark. The second support is at 1,661 pts, which is the low of 19 Jan 2017. On the other hand, the immediate resistance is now set at 1,735 pts, the low of 4 Jun. The following resistance is estimated at 1,800, which is also near the high of 6 Jun (1,797 pts).

Source: RHB Securities Research - 21 Jun 2018