Maintain short positions provided that the 1,676-pt resistance is not violated at the closing. The FKLI formed another white candle on Monday. It rose 10.50 pts to settle at 1,675.50 pts, off its high of 1,679 pts and low of 1,659.50 pts. However, we maintain our negative view, as the FKLI has failed to close above the 1,676-pt resistance mentioned previously. Given that the index has continued to remain below the downtrend line drawn in the chart, it suggests that the downside move is not diminished yet. Overall, we keep our negative view on the FKLI’s outlook.

As seen in the chart, the immediate resistance level is maintained at 1,676 pts, determined from the high of 13 Dec. The next resistance would likely be at 1,729 pts, ie the previous high of 8 Nov. To the downside, we are eyeing the near-term support level at 1,631.50 pts, ie the previous low of 18 Dec. This is followed by the 1,600-pt psychological spot.

Hence, we advise traders to maintain short positions, given that we initially recommended initiating short below the 1,647-pt level on 18 Dec. Meanwhile, a stop-loss can be set above the 1,676-pt threshold in order to limit the risk per trade.

Source: RHB Securities Research - 26 Dec 2018