Overall 2-month weak sentiment remains. The FBMSC closed the week higher at 15,638.80 pts, up 122.82 pts. It formed another white candle after hovering between a low of 15,532.22 pts and a high of 15,638.80 pts. This implies a followthrough of the bullish bias from the previous white candle on 9 Jul’s session. However, the chart above shows that the index is still trapped within the downtrend channel, indicating the overall 2 -month weak sentiment is still ongoing. Technically, a good confirmation that the bulls have strengthened is when the FBMSC manages to breach firmly above the aforementioned downtrend line.

Over the longer-term, we believe the uptrend from 17 Dec 2014-21 Apr 2015 is not fully negated. The current retracement is around 44% of the total 3,000 pts gained during the rally, indicating that there is still some breath left in the bulls.

We set a new immediate support at 15,536 pts, ie 30 Jun’s low, while the crucial support is pegged at the 15,176-pt mark, near 23 Dec 2014’s high and 9 Jul’s low. On the flip side, we are eyeing the immediate resistance at 16,048 pt, ie 2 Jul’s high, followed by the crucial resistance at 16,310 pts on the 100-day MAV line.