Maintain short positions as the previous immediate support is marginally breached. The FKLI formed a black candle in the latest trading, and at the closing, marginally breached below the previous immediate support of 1,631.5 pts, Intraday tone was negative, as the index generally trended lower. The high and low were at 1,655 pts and 1,629.5 pts, before closing at 1,630 pts, indicating a decline of 16 pts. The weak session continued to suggest the index’s retracement leg, which started from the failed attempt to break above the 1,729 pts point, is still developing. While the daily RSI reading is slightly below the oversold threshold, without positive price signals to indicate an end to the weak bias, we keep to our negative trading bias.

As the bears are still showing dominance over the weak price trend, 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 be placed above 1,694.5 pts.

The immediate support is revised to 1,600 pts, a round figure. This is followed by 1,550 pts. Moving up, the immediate resistance is revised to 1,656.5 pts, the high of 26 Mar. This is followed by still 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 - 2 Apr 2019