Maintain short positions. After rebounding from the 50-day SMA line on Wednesday, the FKLI moved lower, piercing below and closing on the 50-day SMA line, at 1,597 pts. It opened at 1,602 pts, only to move between the day’s high of MYR1,603.50 during the early session and the day’s low of MYR1,593 in the evening session before inching up slightly to close at MYR1,597. The negative price actions indicate that seller pressure has re-emerged, and is trying to break below the 50-day SMA line. Since it failed to sustain above the psychological level of 1,600 pts, we may see the bearish momentum retest at 1,584 pts. Although mild, the Bearish Marubozu candle remains intact – an indication that the bears are is still in control. This is coupled with the index which has yet to exhibit a “higher high” pattern. As such, we maintain a negative trading bias.

We recommend that traders stay short positions, which were initiated at 1,593.50 pts or the close of 23 Mar. To manage risks, a stop-loss is set at 1,615 pts.

The support levels remain at 24 Feb’s high of 1,584 pts and 3 Mar’s 1,578-pt high. Towards the upside, the immediate resistance is pegged to 12 Mar’s low of 1,610 pts, followed by 22 Mar’s 1,625-pt high.

Source: RHB Securities Research - 26 Mar 2021