The upside movement could still be extended once the breather below 14,578 pts ends. The FBMSC inched up 61.98 pts to end yesterday’s session at 14,400.42 pts. A white candle was formed after the index oscillated between a low of 14,323.27 pts and high of 14,400.42 pts. Technically speaking, the bullish bias we have seen since April is still exerting itself. Based on the immediate view, chances are high that the upside movement could still be extended once the breather below the 14,578-pt mark ends. At this juncture, there is no change to our 2-month positive view.

From our technical perspective, we believe the FBMSC is in the process of shifting its direction towards the upside from its previous downside trend. This initially started after we detected the earliest reversal signals at the index’s 2-year low, ie 5 Apr’s “Bullish Harami” and 6 Apr’s “Hammer” patterns. In addition, two more reversal patterns appeared this month – the “Double Bottom” and “Bullish Divergence”. Hence, our upside view has been enhanced.

To the downside, our immediate support stays at 13,719 pts, or the low of 5 Apr’s “Bullish Harami” pattern. The following support is pegged at 13,116 pts, which was the low of 25 Aug 2015. Conversely, we revise the immediate resistance at 14,578 pts – this is located at the high of 14 Jun. For the next resistance, look to 15,188 pts, ie 17 Apr’s high.

Source: RHB Securities Research - 21 Jun 2018