No sign for a reversal spotted; maintain short positions. The FKLI ended the latest session weaker by 5 pts at 1,495.5 pts. This was after it reached a high of 1,512.50 pts. The failure of the index to sustain to its earlier session’s gain, and continuously closing below the 1,500-pt level are signalling that the bulls are still lacking strength to reverse the index’s downtrend. This was despite the emergence of the bullish “Piercing Line” formation in the prior session. Premised on this, we are keeping our negative trading bias.

As the negative bias still persists, 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 1,529.5 pts.

The immediate support is maintained at 1,490 pts, derived from 25 Feb’s candle. This is followed by 1,475 pts, near the low of 22 Dec 2011. Towards the upside, the immediate resistance is still at 1,500 pts. This is followed by 1,512.5 pts, the latest high.

Source: RHB Securities Research - 27 Feb 2020