Still no signs of a change in bias; maintain short positions. The FKLI dropped 5 pts to settle at 1,630.5 pts. The session’s low and high were at 1,626.5 pts and 1,639.5 pts. Broadly, the index’s retracement leg that started from the failed attempt to break above the 1,729 pts level is still firmly in place. While it rebounded in the prior two sessions on the oversold daily RSI reading, there is still no clear price signal to suggest a stronger rebound is developing. Towards the upside, the bulls have to first break above 1,646 pts level to possibly end the retracement leg. Until this happens, we keep to our negative inclination.

Give that 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.

Towards the downside, the immediate support is expected to emerge 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 - 17 Apr 2019