Maintain short positions as bulls failed to reverse the decline. The FKLI ended its recent sessions’ attempt to regain above the 1,500-pt level, as it fell 31.5 pts to settle at 1,480.5 pts last Friday. Trading ranged between 1,475.5 pts and 1,498 pts. The negative session has also invalidated the recent bullish “Piercing Line” formation. The decisive breakdown from the 1,500-pt level, which was the multi-year sideways pattern’s support level, is technically negative and has opened the door for a further retracement. Premised on this, we are keeping our negative trading bias.

As the bears are again re-asserting 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 above 1,498 pts.

The immediate support is revised to 1,460 pts, followed by 1,440.5 pts, the low of 15 Dec 2011. Towards the upside, the immediate resistance is set at 1,498 pts, the latest high, followed by 1,513.5 pts, the high of 27 Feb.

Source: RHB Securities Research - 2 Mar 2020