Stays in short positions. The FKLI formed a white candle to settle 8 pts higher at 1,636.5 pts in the latest session. The low and high were at 1,628 pts and 1,637.5 pts. The index’s rebound that started from 18 Apr’s “Hammer” formation is still considered as a minor rebound within a weakening trend – which stretched from the high of 1,729 pts. Towards the upside, for a bigger rebound to possibly take place, the index has to decisively cross above both the downtrend line (as drawn in the chart) and 1,646 pts (trailing-stop for our short positions). Until these materialise, we maintain our negative trading bias.

As there is still no confirmation that a deeper rebound is taking place, 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.

We are still keeping the immediate support at 1,600 pts, followed by 1,550 pts. Moving up, the immediate resistance is pegged at 1,656.5 pts, or the high of 26 Mar. Breaking this may see the index venture towards 1,694.5 pts, the high of 19 Mar.

Source: RHB Securities Research - 29 Apr 2019