Maintain short positions. Yesterday, the FKLI generally trended higher for the whole session and settled slightly above the 50-day SMA line. The low and high were recorded at 1,679 pts and 1,690 pts, before the index closed at 1,689.5 pts, indicating a gain of 13 pts. We note that the FKLI is extending its rebound over the recent sessions. However, until the said SMA line is crossed decisively to signal the bulls have wrested control from the bears, we hold on to our negative trading bias.

As the retracement phase that started from the recent failed attempt to breach above the immediate resistance of 1,729 pts is still in place, 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 is set at 1,631.5 pts, the low of 18 Dec 2018, followed by 1,600 pts. Conversely, 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 - 19 Mar 2019