Maintain short positions. The FKLI closed 11 pts higher at 1,589 pts, near the day’s high of 1,591 pts. The positive session set in after the index hovered around the 1,574-pt immediate support over the previous four sessions – indicating that the bulls may be returning around this level. However, we still believe the index has to close above the 1,595-pt immediate resistance to signal that the counter-trend rebound – which started from 29 Jan’s low – is likely to be extended. Also note that the RSI has crossed above its resistance line – indicating an improving price momentum. Until further price signals emerge, we are maintaining a negative trading bias.

We recommend that traders stick 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 still pegged at 1,574 pts, followed by 1,554 pts. Towards the upside, the immediate resistance is now set at 1,595 pts, followed by 1,605 pts.

Source: RHB Securities Research - 10 Feb 2021