Maintain short positions while waiting for further positive price actions. The FKLI managed to reverse most of its intraday losses in the latest trading, forming a “Hammer” candle. The session’s low and high were posted at 1,609.5 pts and 1,621 pts, before closing at 1,619, indicating a decline of 3 pts. The relatively sharp intraday rebound took place on the back of the positive divergence (Daily RSI), and not too distant from the immediate support of 1,600 pts. For now, to signal a possible stronger rebound taking place, further positive price actions are needed in the coming sessions. Until this happens, we are keeping our negative trading bias.

As the daily chart has not flashed out any signal for further rebound, 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 still expected at 1,600 pts. The following support is at 1,550 pts. Moving up, the immediate resistance is eyed 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 - 18 Apr 2019