Maintain short positions as the retracement leg is still ongoing. The FKLI closed 3 pts weaker to settle at 1,680.5 pts, and continued to trade below the 50-day SMA line yesterday. The session’s low and high were recorded at 1,676.5 pts and 1,687 pts. We still believe the SMA line is an important level that the bulls have to cross for the index to end the retracement leg that started from the recent failed attempt to breach above the immediate resistance of 1,729 pts. Until this happens, we are keeping our negative trading bias.

As the bears are still showing control over the index’s trend, 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.

Towards the downside, the immediate support is set at 1,631.5 pts, or the low of 18 Dec 2018. The second support is eyed at 1,600 pts. On the other hand, 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 - 21 Mar 2019