Maintain short positions. The FKLI failed to inspire a rebound, dipping 1 pt to settle at 1,564 pts. Tracking the overnight bullish sentiment by its US peers, the index gapped up in the morning to open at 1,572 pts. After touching the 1,575.50-pt day high, momentum fizzled out and saw the index falling to the day’s low of 1,561 pts. It closed at 1,564 pts following mild buying pressure by the bulls near the 200-day SMA line. Looking at the bigger picture, the index’s upside is capped by the downtrending line. Noticed the RSI indicator is below 50, showing weak momentum – this indicates the index will likely move sideways for consolidation in the coming sessions. Unless momentum picks up and the index breaches the resistance marked at 1,589 pts to form a “higher high”, we think it will trend lower post consolidation. As such, we are keeping our negative trading bias.

We recommend traders to stay in short positions that were initiated at 1,565 pts, or the closing level of 1 Mar. To manage risks, a stop-loss can be placed above 25 Feb’s high of 1,589 pts.

The support levels remain unchanged at 1,550 pts, followed by 1,538 pts. The resistance levels are pegged at 1 Mar’s high of 1,577 pts and followed by 1,589 pts.

Source: RHB Securities Research - 3 Mar 2021