Maintain short positions. The FKLI breached below the previous immediate support of 1,664 pts yesterday. It generally trended lower throughout the day, registering a high and low of 1,672 pts and 1,656 pts before closing 18.5 pts weaker, at 1,657 pts. The latest negative performance continues to reinforce our view that the retracement leg that started from its recent failed attempt to breach above the immediate resistance of 1,729 pts is still in place. While the Daily RSI is approaching the oversold threshold, until there are signs that a deeper rebound or total price reversal emerges, we maintain a negative trading tone.

As the bias is still tilted towards the extension of the retracement leg, 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 stoploss can be placed above 1,729 pts.

Immediate support is revised to 1,631.5 pts, the low of 18 Dec 2018. Breaking this may see market test 1,600 pts, the next round figure. Towards the upside, immediate resistance is now at 1,664 pts, the low of 2 Jan, followed by 1,729 pts, the high of 8 Nov.

Source: RHB Securities Research - 12 Mar 2019