Maintain short positions as the bulls are still unable to take control. The FKLI settled 7 pts weaker at 1,633 pts yesterday, with trading ranging between 1,626.5 pts and 1,633.5 pts. The weak session indicates that was no positive follow-through from the prior session. Hence, the weak bias that started from the failed attempt to breach above the 1,729-pt level is still in place. Towards the upside, a deeper rebound may only develop should the recent high of 1,640.5 pts and the downtrend line (as drawn in the chart) be decisively breached. Until then, we maintain our negative trading bias.

As the probability of the index posting a deeper rebound is relatively slim at this juncture, we continue to recommend that traders stay 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 keeping the immediate support target at 1,600 pts, followed by 1,550 pts. Meanwhile, immediate resistance is pegged at 1,656.5 pts, the high of 26 Mar. This is followed by 1,694.5 pts, the high of 19 Mar.

Source: RHB Securities Research - 9 May 2019