Bullish indicators suggest a positive performance ahead. The FBMSC ended 75.16 pts higher to 14,253.91 pts last Friday. A white candle without any upper shadow was formed, which implied the session was led by the bulls – and they are still in control of market sentiment. As long as the index does not slip below the 13,719-pt level, we believe the more than 2-month bullish bias continues to exert itself. This is especially after we detected the significant bullish “Double Bottom” and “Positive Divergence” reversal patterns this month – an indication that the trend is turning towards the upside from downside previously.

Overall, the bulls are in control of market sentiment. We initially witnessed the early signs of a positive momentum accumulation in early April. This was after the appearance of 5 Apr’s “Bullish Harami” and 6 Apr’s “Hammer” patterns at the FBMSC’s 2-year low. All these positive indicators support our upside view.

To the downside, we set the immediate support at 13,719 pts, ie the low of 5 Apr’s “Bullish Harami” pattern. This is followed by the 13,116-pt support, which was the low of 25 Aug 2015. Meanwhile, we keep the immediate resistance at 14,578 pts, or the high of 14 Jun. The next resistance is pegged at the 15,188-pt threshold, which was the high of 17 Apr.

Source: RHB Securities Research - 25 Jun 2018