Initiate short positions. The FKLI came under ramped-up selling pressure in the second half of the session, and closed 12 pts weaker at 1,579 pts. Consequently, the previous immediate support of 1,585 pts and 2.5-week countertrend rebound’s (the rebound stalled at the 50-day SMA line early this week) support line have also been breached, signalling that the multi-week correction phase that started in mid-Dec 2020 may be resuming. Based on the index’s correction pattern, the minimum expectation is for the index to retest the 29 Jan low of 1,554 pts. Premised on this, we switch our trading bias from positive to negative.

Our previous long positions, initiated at 1,598 pts – the closing level of 10 Feb – were closed out at 1,585 pts in the latest session. As such, we have opened long positons. To manage risks, a stop-loss can be placed above 1,600 pts.

The immediate support is revised to 1,574 pts, followed by 1,554 pts. Towards the upside, the immediate resistance is maintained at 1,600 pts, followed by 1,610 pts.

Source: RHB Securities Research - 19 Feb 2021