Maintained short positions as the index failed to rebound. The FKLI failed in its attempt to rebound in the latest session. The intraday tone was negative, as it generally moved lower for the whole session, the high and low were posted at 1,641 pts and 1,628.5 pts, before it ended at 1,629 pts, indicating a decline of 1 pt. The intraday reversal continued to show the bulls are still lacking the strength to reverse the index’s weak bias – this is despite the fact the Daily RSI is now flashing an oversold reading. All in, the retracement leg that started from the failed attempt to breach above the 1,729 pts level is still in place. Maintain negative trading bias.

With no price actions to suggest the weakening trend has reached an end, 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.

Towards the downside, the immediate support is pegged at 1,600 pts, a round figure. This is followed by 1,550 pts. On the other hand, the immediate resistance is expected at 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.

Source: RHB Securities Research - 3 Apr 2019