Maintain short positions while waiting for further price signals. The FKLI failed to maintain its earlier session’s positive tone and at the closing, fell marginal by 1.5 pts at 1,645 pts. The high and low were posted at 1,638.5 pts and 1,650 pts. The index’s inability to settle higher suggests that there was no positive follow-up from the prior session’s rebound. For now, as long as the index is still capped by the immediate resistance of 1,656.5 pts, the overall negative bias that started from the 1,729-pt level would still be in place. Maintain our negative trading bias.

As there are no price confirmation that the index is ready to pose a 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 1,656.5 pts.

Towards the downside, we are expecting the immediate support to emerge at 1,600 pts, this is followed by 1,550 pts. On the other hand, 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 - 5 Apr 2019