Retracement leg is still firm; maintain short positions. The FKLI’s downward leg resumed after a pause that lasted through two sessions. Yesterday, it shed 30 pts to close at 1,398.5 pts, which was slightly below the 1,400-pt support level. Trading ranged between 1,397 pts and 1,418 pts. The weak session continues to prove that the index’s bearish tone is firmly in place – more so after it recently breached below the 1,500-pt multi-year sideways move’s critical support level. Premised on this, we are maintaining our negative trading bias.

With the downtrend still in effect, 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 now be placed above the 1,440-pt mark.

The next support level is at 1,385.5 pts, the low of 6 Oct 2011. This is followed by 1,364.5 pts, the low of 5 Oct 2011. Towards the upside, the immediate resistance is set at 1,418 pts, the latest high. This is followed by 1,440-pts, the high of 11 Mar.

Source: RHB Securities Research - 13 Mar 2020