Maintain short positions while tightening up trailing-stop. The FKLI experienced a relatively wide intraday swing – the low and high were recorded at 1,524.5 pts and 1,541 pts, before it closed marginally higher by 0.5 pts at 1,537 pts. The index has been attempting to stage a rebound after its recent retracement hit a low of 1,581.5 pts on 3 Feb. Towards the upside, should the index manage to cross above 4 Feb’s high of 1,543 pts, the prospect for the index to stage a stronger rebound would be higher. Until this happens, we keep to our negative trading bias.

Pending a signal for a rebound to develop, we advise traders to stay in short positions. We initiated these at 1,544.5 pts, the closing level of 28 Jan. To manage risks, a stop-loss can be placed at the breakeven mark.

Immediate support is maintained at 1,530.5 pts, the high of 3 Feb, followed by 1,518.5 pts, the low of 3 Feb. Conversely, the immediate resistance is revised to 1,543 pts, the high of 4 Feb, followed by 1,557.5 pts – the high of 31 Jan.

Source: RHB Securities Research - 6 Feb 2020