Maintain short positions while waiting for confirmation of a deeper rebound. The FKLI formed a white candle in the latest session as it managed to reverse its earlier weakness to settle at 1,665 pts, indicating a gain of 15.5 pts. For the intraday, the index generally moved higher. with the low and high at 1,641 pts and 1,668 pts. The recent sessions’ price actions indicate the index may have found an interim support. A deeper rebound may develop in the coming sessions, if it pushes above the immediate resistance of 1,676 pts. Until this happens, we maintain our negative trading bias.

Pending confirmation that a deeper rebound is developing, we recommend that traders keep to short positions. These were initiated at 1,647 pts, the closing level of 17 Dec. For risk management purposes, a stop-loss can be placed above 1,676 pts.

Immediate support is maintained at the 1,600-pt mark. The second support is at 1,550 pts. Moving up, the immediate resistance is now expected at 1,676 pts, the high of 13 Dec. This is followed by 1,729 pts, the high of 8 Nov.

Source: RHB Securities Research - 24 Dec 2018