Maintain short positions as there are still no signs for a stronger rebound. The index posted a marginal gain of 1 pt to close at 1,637.50 pts. This was after it swung between a gain and loss, with the low and high registered at 1,633 pts and 1,640.5 pts. Still, until the index manages to decisively crack above both the downtrend line (as drawn in the chart) and the 1,646-pt level (trailing-stop for our ongoing short positions), the possibility for the index to stage a bigger rebound would be relatively slim. For now, we are still regard the rebound that started from the 18 Apr’s “Hammer” formation as just a relief rebound on the recent weeks’ retracement. Maintain our negative trading bias.

As the weak trend that started from the failed attempt to breach above 1,729-pt level is still firmly in place, traders should remain in short positions. These were initiated at 1,698 pts, the closing level of 1 Mar. To manage risks, a stoploss can be placed above 1,646 pts.

We are eyeing the immediate support to emerge at 1,600 pts, followed by 1,550 pts. Conversely, the immediate resistance is pegged at 1,656.5 pts, or the high of 26 Mar. This is followed by 1,694.5 pts, the high of 19 Mar.

Source: RHB Securities Research - 30 Apr 2019