Bulls are unlikely to test the recent high for now; maintain short positions. The FKLI closed 9 pts lower last Friday, at 1,370.5 pts, after trading ranged between 1,362.5 pts and 1,374 pts. The negative performance was a followup from the prior session’s failed attempt to recoup the 50-day SMA line. We believe that chances are high that the index is still in the early stage of developing a retracement phase, after it completed its slightly over 1-month countertrend rebound. The said rebound’s high was marked by the 20 Apr’s “Shooting Start” formation, and recorded a high of 1,425.5 pts. We maintain our negative trading bias.

As we believe the retracement can still be extended further, 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.

We are keeping the immediate support 1,360 pts, followed by 1,340 pts. Conversely, 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 - 27 Apr 2020