Maintain short positions as the index is still capped by the downtrend line. The FCKLI formed a white candle in the latest trading to settle 14.5 pts higher at 1,654.5 pts. Intraday, the tone was positive as the index trended higher throughout the session with the low and high registered at 1,637 pts and 1,656.5 pts. The positive session can be seen as a sign that the index is taking a breather after the recent weakness. As long as the index is still capped by the downtrend line (as drawn in the chart), its overall multi-month weak bias would still remain in place. Hence, we are keeping to our negative trading bias.

As the index is merely taking a pause after the recent decline (we are still not seeing a price reversal signal), we recommend traders to keep to short positions. These positions were initiated at 1,647 pts, the closing level of 17 Dec. For risk management purposes, a stop-loss can be placed at above 1,706.5 pts.

We are still expecting the immediate support to emerge at the 1,600-pt mark, a round figure. The second support is at 1,550 pts. Moving up, the immediate resistance is now expected at 1,706.5 pts, the high of 27 Nov. This is followed by 1,729 pts, the high of 8 Nov.

Source: RHB Securities Research - 20 Dec 2018