Maintain short positions as the minor bounce is within expectations. The FKLI posted a second consecutive positive performance yesterday, adding 10 pts to close at 1,428.5 pts. The high was at 1,440 pts. The latest two sessions’ positive price reactions point to just a minor pause by the bears, after the index dropped sharply on 9 Mar. There is no price signal that could indicate the bearish trend has reached its low. The potential for the downward move to be extended further is still strong, since it has breached below its multi-year support level of 1,500 pts. We maintain our negative trading bias.

Traders should 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 the 1,454-pt mark.

The immediate support is revised to 1,415.5 pts, the latest low, followed by 1,400 pts. Moving up, the immediate resistance is set at 1,430 pts, followed by 1,454 pts – both are derived from 9 Mar’s candle.

Source: RHB Securities Research - 12 Mar 2020