Index continues to retrace below 1,500-pt mark; maintain short positions. The FKLI continued to trade on soft footing, and closed at 1,456.5 pts yesterday, after registering a low and high of 1,444 pts and 1,474 pts. The negative session is a continuation from the prior session’s valid breakdown from the 1,500-pt multi-year support level. Despite the RSI reading having again fallen into oversold territory, there is no positive price signal that could indicate that a potential interim low has been established. We maintain our negative trading bias.

As the bears control the price trend presently, 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 1,492 pts.

The immediate support is revised to 1,440.5 pts, the low of 15 Dec 2011. This is followed by 1420 pts, near the low of 25 Nov 2011. Moving up, the immediate resistance is set at 1,474 pts, the latest high, followed by 1,492 pts – derived from 28 Feb’s candle.

Source: RHB Securities Research - 3 Mar 2020