Maintain short positions. The FKLI softened 8.5 pts to settle at 1,596 pts. The intraday tone was weak, as the index generally moved lower for the entire session. At this juncture, we still believe the weak trend that started from the failed attempt to break above 1,729 pts is still in place. For the trend to switch to positive, the FKLI has to breach above the downtrend line (as drawn in the chart) and the 1,646-pt level. Until this happens, the rebound that started from the 14 May’s “Piercing Line” formation can only be regarded as a minor rebound on the back of the recent weeks’ sharp retracement. We maintain our negative trading bias.

As the rebound is still considered a minor one, we 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.

Immediate support is expected to emerge at 1,550 pts, followed by 1,500 pts. On the other hand, the immediate resistance is now set 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 - 17 May 2019