Maintain short positions while waiting for possible rebound signals. The FKLI performed encouragingly in the latest session - as it generally trended up for the whole session to settle at the high of 1,633.5 pts, indicating a gain of 13 pts. Consequently, a “Bullish Harami” formation was formed. This came after the index recent weeks’ retracement that sent its daily RSI into an oversold reading and flashing out a positive divergence signal. Price actions in the coming sessions would be important to observe, as a positive follow-up with an upside breach of 1,646 pts (our trailing-stop) would likely signal a stronger rebound developing. Until this happens, we keep to our negative trading bias.

Until there is a clear confirmation to indicate the bearish bias has reached an end, traders should remain 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 1,646 pts.

Towards the downside, the immediate support is set at 1,600 pts. This is followed by 1,550 pts. Moving up, the immediate resistance is set at 1,656.5 pts, or the high of 26 Mar. This is followed by 1,694.5 pts, or the high of 19 Mar.

Source: RHB Securities Research - 15 Apr 2019