Downtrend is extending; maintain short positions. The FKLI closed 4 pts weaker yesterday at 1,546 pts, after it reached a low and high of 1,538.5 pts and 1,550 pts. The negative session is a continuation of the index’s retracement leg, which resumed after it failed to cross above the 200-day SMA line last December and in early January. While the recent retracement is approaching an oversold RSI reading, in the absence of a positive price reversal signal, we are keeping to our negative trading bias.

We continue to advise traders to stay in short positions. We initiated these at 1,522.5 pts, the closing level of 28 Jan. To manage risks, a stop-loss can be placed above 1,566.5 pts.

We are keeping the immediate support target at 1,538.5 pts, the low of 7 Sep 2015, followed by the 1,500-pt mark. Conversely, the immediate resistance is expected at 1,557.5 pts, the lows of 9 and 10 Dec 2019, followed by 1,566.5 pts, the low of 24 Jan.

Source: RHB Securities Research - 31 Jan 2020