Maintain short positions until signs of rebound from the immediate support show up. The FKLI managed to reverse its earlier session’s weakness to close 3 pts higher at 1,640.5 pts. The low and high were recorded at 1,634.5 pts and 1,641 pts. Despite the positive session, based on the daily chart, it is too early to conclude that a deeper rebound or total price reversal is taking place from the immediate support level of 1,631.5 pts. This suggests the retracement leg that started from the recent failed attempt to breach above the resistance level of 1,729 pts is still in place. Maintain our negative trading bias.

As the negative trend is not showing signs of reaching 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.

Towards the downside, the immediate support is set at 1,631.5 pts, or the low of 18 Dec 2018. This is to be followed by 1,600 pts. Moving up, the immediate resistance is set 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 - 29 Mar 2019