Maintain short positions on expectation that 50-day SMA would give way. The FKLI continued to trade in a narrow band in the latest session – between 1,682 pts and 1,688.5 pts – before closing at 1,686.5 pts, implying a 2-pt gain. Price actions over the recent sessions still suggest the bulls are lacking the strength to push the index up from the 50-day SMA line area, this implies the negative tone that started from the high of the 29 Jan’s “Bearish Engulfing” formation is still in place. The daily RSI reading has crossed below the support line (as drawn in the chart) and is now reaching the neutral reading – this also signals a weak momentum. Consequently, we maintain our negative trading bias.

As the bias is still tilted towards the breakdown from the said SMA line, we continue to recommend that traders maintain short positions. We initiated these at 1,664.5 pts, the closing level of 2 Jan. To manage risks, a stop-loss can be paced above 1,706 pts.

Towards the downside, the immediate support is maintained at 1,631.5 pts, the low of 18 Dec 2018. The following support is at the 1,600-pt mark. Moving up, the immediate resistance is eyed at 1,706 pts, the high of the 28 Jan’s “Bearish Engulfing” formation. This is followed by 1,729 pts, the high of 8 Nov.