Maintain short positions on expectation of the immediate support being retested. The FKLI extended its recent weak performance into the latest session. The index weakened 12 pts to settle at 1,645 pts – the low and high were registered at 1,640 pts and 1,652 pts. The weak session indicates the index’s retracement that started from the failure to breach above the 1,729 pts is still developing – this is further supported by the fact that it is current trading below both the 50-day SMA line and the previous uptrend line (as drawn in the chart). Based on its current price trajectory, we are expecting the immediate support of 1631.5 pts to be tested. Maintain negative trading bias until signs of rebound emerge.

As there no indications to suggest the negative bias has reached an end, 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 now be placed above 1,694.5 pts.

The immediate support is eyed at 1,631.5 pts, or the low of 18 Dec 2018. This is followed by 1,600 pts. Meanwhile, the overhead resistance is pegged at 1,694.5 pts, the high of 19 Mar. This is followed by 1,729 pts, the high of 8 Nov.

Source: RHB Securities Research - 26 Mar 2019