Buying support still dominates at the close of the index yesterday. The index stayed clear above the 1,630-pt level and closed at its highest in 6 days on a white candle, continuing the upward bias since the hint of buying from last Friday's candle. This keeps the selling activity, which took over since the failed test of the 1,650-pt resistance level two weeks ago, in the back seat. The index is comfortably above both 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 index is expected to continue higher today and again, a firm buying support should not see it closing below 1,630 pts. Immediate resistance is now 23 July's high of 1,645 pts and a close above will erase the negative bias of 26 July's 'Long Black Day'. Again, a break of the psychological 1,650 pts (tested twice last week) is required to cancel late July's negative bias. However, a failure to hold above 1,630 pts suggests that the weakness seen last week may resume, confirmed by a close below Monday's low of 1,623 pts that it failed to break last Thursday and Friday. Further support is at 1,614 pts, followed by 5 July's low of 1,610 pts. Stronger support remains just above the 1,600-pt psychological level, at the three-week low of 1,602.50 pts.

Selling still dominates as the commodity remains below the RM2,950 resistance level. Thus, the selling that started on 6 July continues, moving downwards since late March, with the latest lower highs at RM3,193 and RM3,182. The commodity remains below the declining 50-day MAV line and the 200-day MAV lines, which was reinforced by the longer-term negative indication of the 'Death Cross' that emerged in early July. Note however, yesterday's white candle gives a hint of upward bias, more so from the rebound off the RM2,900 strong support level.

The commodity is expected to trade lower today and again, a firm downside bias should not see the commodity closing back above RM2,950. Strong support remains at RM2,900, where a false breakout occurred last week and a violation is needed to keep the negative bias going. A crowded support level lies just below. Support is expected at the Oct 2011 covered gap of RM2,820 and then at the psychological RM2,800. Stronger support is expected at the Oct 2011 low of RM2,750. Minor support is also expected at RM2,850. However, a sustained trade above RM2,950 may indicate a continuation of upward bias seen yesterday. Resistance remains at Wednesday's morning low of RM2,975, followed by RM3,000. Only a close back above the RM3,000 psychological level will confirm the return of buying. The next resistance is then at the broken supports of RM3,050 and RM3,100 ' the 76% retracement of the late May-early June decline and 38% of the Apr-June decline. Minor resistance is also expected at RM3,030 and RM3,070.

Source: OSK