Maintain short positions. The FKLI’s rebound extended further, and it closed 8.5 pts higher at 1,612 pts yesterday. The index opened at 1,606 pts, but trading was choppy – the FKLI oscillated between the day’s high of 1,612.5 pts and low of 1,603 pts throughout the session. As we mentioned previously, the index has established an interim low near the 50-day SMA line, where it bounced off the consolidation zone and pierced through the previous resistance level of 1,610 pts. Meanwhile, the RSI was strengthening above the 50% threshold – which suggests that the recent bullish momentum may continue. Although the index was able to move past the previous resistance, it has yet to breach the stop-loss of 1,615 pts. As such, we are maintaining a negative trading bias.

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

The support levels are revised to 12 Mar’s low of 1,610 pts and 24 Feb’s high of 1,584 pts. Towards the upside, the immediate resistance is pegged at 22 Mar’s 1,625-pt high, followed by 12 Mar’s high of 1,634.5 pts.

Source: RHB Securities Research - 31 Mar 2021