Maintain short positions as the 50-day SMA line is challenged. The FKLI continued to retrace in yesterday’s session, closing near the 50-day SMA line. The low and high were recorded at 1,681 pts and 1,698 pts, before ending at 1,686.5 pts, indicating a gain of 11.5 pts. The weak session suggests the retracement that started from the recent failed attempt of breaching above the immediate resistance of 1,729 pts, is still ongoing. The latest price actions around the said SMA line does not indicate signs of a rebound or reversal. Hence, we keep to our negative trading bias.

As the index’s retracement phase is not showing any signs of ending, we continue to recommend traders to maintain short positions. These positions were initiated at 1,698 pts the closing level of 1 Mar. To manage risks, a stop-loss can be placed above 1,729 pts.

The immediate support is maintained at 1,664 pts, the low of 2 Jan. This is followed by 1,631.5 pts, the low of 18 Dec 2018. Moving up, the immediate resistance is set at 1,729 pts, the high of 8 Nov. This is followed by 1,749.5 pts, the high of 17 Oct 2018.

Source: RHB Securities Research - 5 Mar 2019