The positive view remains intact, as the bullish bias persists above 13,719 pts. Yesterday’s session was led by the bears, as the FBMSC slipped 114.89 pts to 13,951.04 pts. A black candle was formed after the index hovered between a low of 13,924.28 pts and high of 14,090.30 pts. As a result, the FBMSC dipped near the 13,719-pt support. Nevertheless, as long as this support is not taken out, this implies the bullish bias we have seen since early April is still in play.

Based on the current technical landscape, we think the bulls are still dominating market sentiment. Until we see a strong downside movement, we believe the index is merely taking a breather below the 14,578-pt mark. This is viewed as a normal reaction after the FBMSC posted a more than 800-pt increase and breached above the 50- day SMA line during the 31 May-14 Jun period.

We keep the immediate support at 13,719 pts, or the low of 5 Apr’s “Bullish Harami” pattern. If this level is taken out, the following support is seen at 13,116 pts, which was 25 Aug 2015’s low. Conversely, the immediate resistance is pegged at 14,578 pts, ie 14 Jun’s high. This is followed by the 15,188-pt resistance, or 17 Apr’s high.

Source: RHB Securities Research - 28 Jun 2018