Rebound failed to sustain; initiate short positions. The FKLI failed to extend its previous session’s strong performance. At the closing, it settled 63.5 pts lower at 1,242 pts. The low and high were recorded at 1,222.5 pts and 1,268 pts. The negative session also breached below the previous support levels of 1,285 pts and 1,65 pts. More importantly, it has invalidated our bias for it to stage a counter-trend rebound, thus signalling that the index’s retracement leg may be resuming. Premised on this, we switch our trading bias to negative.

Our previous long positions initiated at 1,305.5 pts, the closing level of 20 Mar were closed out at the 1,265-pt level in the latest session. As the risk is high for the retracement phase to resume, we initiate short positions at the latest closing. For risk management purposes, a stop-loss can be placed above 1,268 pts.

We revised the immediate support to 1,222.5 pts, the latest low. This is followed by 1,210, derived from 19 Mar’s candle. Moving up, the immediate resistance is now pegged at 1,268 pts, the latest low. This is followed by 1,280 pts.

Source: RHB Securities Research - 24 Mar 2020