Maintain short positions as the rebound may have ended. The FKLI ended its three sessions’ rebound to settle 6 pts lower, at 1,471 pts. The low and high were posted at 1,466.5 pts and 1,476.5 pts. The negative session has likely marked the end of the index’s rebound, and indicates that its downward move may be resuming. Our negative bias is supported by the fact that the index is still trading below its previous multi-year support level of 1,500 pts. Premised on this, we are keeping our negative trading bias.

On the expectation that the bears are re-asserting control, traders are advised to remain 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 1,487.5 pts.

The immediate support is still pegged at 1,460 pts. This is followed by 1,444 pts, the low of 2 Mar. Towards the upside, the immediate resistance is now pegged at 1,487.5 pts, derived from 28 Feb’s candle. This is followed by the 1,500-pt level.

Source: RHB Securities Research - 9 Mar 2020