The uptrend faced a setback yesterday as sellers returned, keeping the index below the 1,625-pt resistance level. Nonetheless, this does not signal the end of the rally as yesterday's move did not even cancel the upward bias of last Friday's 'Long White Day'. The index is now comfortably above the 50-day MAV line and the rising 200-day MAV line, supported by the longer-term positive 'Golden Cross' that emerged in February.

Thus, the upward momentum of the index is expected to continue and a firm upward bias should not see the index closing below yesterday's low of 1,617 pts, and certainly not below the support level of 1,614 pts. Resistance remains at last week's high of 1,625 pts, followed by the round figure of 1,630 pts. Further selling can then be reasonably expected at every 10-pt interval. Again, a firm uptrend should see the index above the 1,614-pt support level, with the next support is at 5 July's low of 1,610 pts. Stronger support is just above the 1,600-pt psychological level, at last week's low of 1,602.50 pts.

As indicated yesterday, last Friday's selling pressure has not reversed the upward bias of the rebound that started in mid-June. Despite rather indecisive trading yesterday, the commodity still closed higher, above the RM3,150 resistance level and back above the 200-day MAV line. This, however, does not indicate that the negative bias from Friday's black candle has been erased. Note, too, that lower highs may continue as the recent high of RM3,182 is below that of May's high at RM3,193. The longer-term negative indication of the 'Death Cross' also emerged two weeks ago.

Thus, the commodity has to overcome the weak bias of last Friday's black candle by closing above RM3,183 today to keep the three-week rebound going. Further resistance is at the area of RM3,200-RM3,250, where the gap of 14 May and the 50% retracement level of the Apr-June decline lie. However, a close back below RM3,150 could see a continuation of selling that emerged last Friday. A close below RM3,100, the low of the 'Long White Day' of last Thursday, the 76% retracement of the late May-early June decline and 38% of the Apr-June decline, should confirm the weakness. Further support is at the 2 June gap of RM3,050, followed by RM2,992, which withstood multiple tests two weeks ago.

Source: OSK