The 1-month outlook is still weak. Yesterday, the FBMSC posted another 163.33-pt gain, opening higher at 14,987.21 pts and closing at 15,132.42 pts. It printed a white candle, showing that the positive momentum we observed in the previous session has continued. However, we view this rebound as not significant yet, as the overall index is still fluctuating near the 14,815-pt support leve. Judging from the chart above, a solid bullish development would be achieved if the FBMSC manages to breach above the 15,441-pt resistance mark. For now, we think that the sentiment for the past month is still under the influence of the bears.

The index dropped by around 1,000 pts in 7 Jan to 21 Jan. During this period, due to the strong influence of the bears, it fell significantly below the 200-day MAV line. Technically, we view the current bearish development as still encouraging. Despite the appearance of the reversal “Bullish Harami” candlestick pattern on 22 Jan, there was no significant rebound inactivities detected. As such, we maintain our negative outlook.

Our immediate support stays at 14,815 pts, pegged to the low of the “Bullish Harami” pattern, followed by the critical support at the 14,543-pt level, ie 29 Sep 2015’s low. Conversely, the immediate resistance is situated at 15,441 pts, which was the low of 14 Dec 2015. Should this line be violated, look to 16,141 pts – 7 Jan’s high – as the next critical resistance.

Source: RHB Research - 17 Feb 2016