Maintain short positions as the trend is still negative. The FKLI advanced 6 pts to settle at 1,676.5 pts last Friday. The intraday movement was encouraging as it generally trended higher, with the low and high at 1,666 pts and 1,680 pts. Still, we regarded the index’s retracement that started from its recent failed attempt to crack the 1,729 pts resistance mark as still valid. Price rebounds in recent sessions can be taken as a minor consolidation below both the 50-day SMA line and the previous uptrend line (as drawn in the chart). Based on these, we maintain our negative trading bias.

As there is a lack of technical evidence that suggests the bulls are ready to recapture the 50-day SMA line – to signal a possible shift in bias, 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.

The immediate support remains at 1,631.5 pts, the low of 18 Dec 2018, followed by 1,600 pts. Moving up, the immediate resistance is expected 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 - 18 Mar 2019