Risk is still tilted towards the downside, maintain short positions. The FKLI failed to post a follow-up from the prior session’s positive performance. At the closing, the index weakened 7.5 pts to close at 1,532 pts. This means there is still no positive price signal to indicate the index’s retracement has reached an end. Towards the downside, we still believe the 1,518.5 support level is likely to be retested by the bears. Additionally, the retracement has yet to flash out an oversold reading. Hence, we are keeping to our negative trading bias.

On the observation that the bears are still in firm control over the price trend, 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 at the breakeven level.

We are keeping the immediate support at 1,526.5 pts, derived from 5 Feb’s candle. This is followed by 1,518.5 pts, the low of 3 Feb. Conversely, the immediate resistance is set at 1,543.5 pts, the high of 19 Feb. This is followed by 1,550 pts, derived from 12 Feb’s candle

Source: RHB Securities Research - 24 Feb 2020