Maintain short positions. The FKLI stuck to its past three weeks’ favourite intraday trading pattern of opening strongly but ending the day lower. It reached an intraday high of 1,587 pts during the opening minute to test the immediate resistance of 1,585 pts. However, it struggled to maintain this positive momentum, sliding to a low of 1,575 pts, before closing at 1,578 pts – a 1-pt drop. The index has been hovering near the 1,574-pt immediate support over recent sessions, and this reinforces the significance of this support level. Should this level be breached, there is a good possibility of the index revisiting its recent low of 1,554 pts. With the index still unable to signal a stronger counter-trend rebound as it still capped by the 1,595-pt resistence, we are keeping our negative trading bias.

We recommend that traders keep to short positions, which were initiated at 1,598 pts, or the closing level of 21 Jan. To manage risks, a stop-loss can be set above 1,595 pts.

The immediate support is maintained at 1,574 pts, followed by 1,554 pts. Moving up, the immediate resistance is maintained at 1,585 pts, and followed by the 1,595-pt level.

Source: RHB Securities Research - 9 Feb 2021