The positive view that started since early April remains in play. Last Friday was a bearish session, as the FBSMC posted a 92.97-pt loss to 13,891.31 pts. It charted a black candle after it oscillated between a low of 13,871.05 pts to 13,995.25 pts. However, there is no change to our positive view, given that the index has managed to stay above the 13,719-pt support. As long as this level is not taken out, we believe the bullish bias that started since early April has not been fully negated yet.

We initially saw a potential shift in the movement trend towards the upside from the prior downside. This was after the appearance of two meaningful 2-year low reversal signals, ie 5 Apr and 6 Apr’s “Bullish Harami” and “Hammer” patterns. Based on the daily chart, the current technical landscape suggests the bulls are still dominating market sentiment.

We keep the immediate support at 13,719 pts, which was obtained from the low of 5 Apr’s “Bullish Harami” pattern. For the next support, look to 13,116 pts, ie 25 Aug 2015’s low. Towards the upside, our immediate resistance is maintained at 14,578 pts, which is located at the high of 14 Jun. This is followed by the 15,188-pt resistance, or 17 Apr’s high.

Source: RHB Securities Research - 9 Jul 2018