Bulls are still lacking strength; maintain short positions. The FKLI continued to fail in showing signs of posing a deeper rebound in the latest session – giving back most of its intraday gains towards the end of the session. The index reached a high of 1,650.5 pts before it slid to close at 1,642 pts, indicating a marginal gain of 1.5 pts. Overall, the index’s negative bias that started from the failed attempt to breach above the 1,729 pts resistance level is still in place. It latest two sessions’ price actions are merely indicative that a minor consolidation is likely to take place near the immediate support of 1,631.5 pts. Based on these observations, we keep to our negative trading bias.

As the bulls are still not showing signs of regaining control from the bears, we advise traders to stay in 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 expected 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 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 - 1 Apr 2019