Maintain short positions as the index is still being pressured. The FKLI latest performance indicates that the bulls are still unable to breach the 50-day SMA line. The index experienced a negative intraday price reversal after it tested the said SMA line with a high of 1,395 pts, before retracing to close 5 pts weaker at 1,379.5 pts. All in, the FKLI is likely in the early stages of developing a retracement phase, after completing slightly more than a month’s counter-trend rebound. The rebound’s top was marked by the 20 Apr’s “Shooting Star” formation. Maintain our negative trading bias.

As the bulls are still being denied by the said SMA line, we recommended that traders stay in short positions, initiated at 1,370 pts – the closing level of 21 Apr. To manage risks, a stop-loss can be placed above 1,410 pts.

The immediate support is maintained at 1,360 pts, followed by 1,340 pts. Moving up, the immediate resistance is at 1,395 pts – the price point of 21 Apr. This is followed by 1,410 pts, near the 50-day SMA line.

Source: RHB Securities Research - 24 Apr 2020