Stay in short positions while tightening up the trailing-stop. The FKLI formed a white candle yesterday, closing 17.5 pts higher at 1,646.5 pts. The intraday tone was encouraging as the index generally scaled higher for the entire session, while the low and high were at 1,632 pts and 1,647 pts. For now, we deem the positive session as just a minor rebound (on the back of the oversold Daily RSI reading) within the context of the retracement phase that started from the recent failed attempt to break above the 1,729-pt level. Towards the upside, for now, should the index manage to crack above the immediate resistance of 1,656.5 pts in the coming sessions, the bias may turn positive. Until that happens, we keep to our negative trading bias.

Until there is a signal of a deeper rebound or total price reversal, we continue to 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 1,655.5 pts.

The immediate and secondary supports are at 1,600 pts and 1,550 pts. Moving up, the immediate resistance is eyed at 1,656.5 pts, the high of 26 Mar. This is followed by 1,694.5 pts, the high of 19 Mar.

Source: RHB Securities Research - 4 Apr 2019