No signs of deeper rebound; maintain short positions. The FKLI softened 3 pts to settle at 1,642.5 pts, the low and high were posted at 1,638.5 pts and 1,648 pt. Overall, there is still a lack of technical evidence to suggest the index is primed for a deeper rebound at this juncture. This implies, based on the daily chart, the index’s negative bias that started from the failed attempt to break above the 1,729 pts level is still in place. Towards the upside, a firm upside breach of the immediate resistance of 1,656.5 pts would likely to signal a deeper rebound may be developing. Until that happens, we keep to our negative trading bias.

As the index’s overall price trajectory is still negative, 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 be placed above 1,656.5 pts.

We still peg the immediate support at 1,600 pts. The following support may appear at 1,550 pts. Conversely, the immediate resistance is set 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 - 10 Apr 2019