Maintain short positions. The FKLI was unable to stage a rebound again yesterday, and gave back most of its intraday gains to settle just 1 pt higher at 1,679.5 pts. The session’s low and high was at 1,676.5 pts and 1,686.5 pts. The index has been consolidating below the 50-day SMA line over the last three sessions – this came after a price rejection from the 1,729-pt immediate resistance. Based on its price actions, we believe the retracement will likely be resumed once this minor consolidation is over. We maintain our negative trading bias on the FKLI.

As there are no signs to suggest the retracement leg has ended, we continue to recommend that traders maintain short positions. These 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.

Immediate support is pegged at 1,664 pts, the low of 2 Jan. The following support is expected to emerge at 1,631.5 pts, the low of 18 Dec 2018. Moving up, the immediate resistance is set at 1,729 pts, or the high of 8 Nov. This is followed by 1,749.5 pts, which was the high of 17 Oct 2018.

Source: RHB Securities Research - 8 Mar 2019