Maintain short positions as the weak trend has yet to show signs of reversing. The FKLI recouped most of its earlier session’s losses and settled 1 pt lower, at 1,542.5 pts. At one point, it again tested the immediate support of 1,538.5 pts with an intraday low of 1,533.5 pts. While it managed to rebound from the immediate support, there was no strong technical evidence indicating that the index’s weak bias has ended. This retracement leg resumed after the index was rejected from the 1,557.5-1,566.5pt resistance zone. As such, we maintain our negative trading bias.

As the 1,518.5-pt level is likely to be retested, we advise traders to stay in short positions. We initiated these at 1,548.5 pts, the closing level of 12 Feb. To manage risks, a stop-loss can be placed above 1,566.5 pts.

Immediate support is eyed at 1,538.5 pts, the low of 10 Feb. This is followed by 1,526.5 pts, derived from 5 Feb’s candle. Conversely, the immediate resistance is set at 1,550 pts, derived from 12 Feb’s candle. This is followed by 1,560.5 pts, the high of 11 Feb.

Source: RHB Securities Research - 19 Feb 2020