Continues sliding despite extremely oversold; maintain short positions. The FKLI continued to extend its retracement in the latest session. At the closing, it gave up 70 pts to close at 1,261.5 pts – slightly above the session’s low of 1,261 pts. The decline is a continuation from the recent breakdown from the multi-year support level of 1,500 pts. Despite the RSI now flashing out an extremely oversold reading, the weak performance indicates there is still no price signal to suggest, at the minimum, an interim low has been reached. Hence, we are keeping our negative trading bias.

As the index has failed to establish an interim low, 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 1,305-pt mark.

The immediate support is revised to 1,240 pts, near the low of 25 May 2010. This is followed by 1,219.5 pts, the low of 9 Feb 2010. Moving up, the immediate resistance is pegged at 1,280-pt level, derived from the latest candle. This is followed by 1,305 pts, price point of 13 Mar.

Source: RHB Securities Research - 17 Mar 2020