Maintain short positions as the bulls are still struggling to gain control. The FKLI edged up marginally by 2 pts to settle at 1,635.50 – this was after it gave back most of its intraday gains toward the end of the session. The high and low were registered at 1,640.50 pts and 1,632.5 pts. While the index has showed signs of rebound over the latest two sessions on the back of an oversold daily RSI reading, further positive price actions are needed to signal that a stronger rebound is probably developing. For now, we are still looking to the upside breach of 1,646 pts (our trailing-stop for the ongoing short positions) as the required positive signal. Until this happens, we keep to our negative trading bias.

As the 12 April’s “Bullish Harami” is still unconfirmed, 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.

The immediate support is pegged at 1,600 pts. This is followed by 1,550 pts. Meanwhile, the immediate resistance is expected 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 - 16 Apr 2019