Bearish indicators points towards a negative outlook. The FSSTI closed yesterday’s session at 3,253.01 pts and posted a 3.93-pt gain. It formed a white candle after hovering between a low of 3,240.22 pts and high of 3,263.42 pts. This implies that the session was led by the bulls. However, we make no changes to our bearish view, as no strong upside development has been sighted yet. Despite the momentum in the “Bullish Harami” candlestick pattern on 9 Jul, no solid positive follow-through has been sighted. From our technical perspective, the bears are still in firm control of market sentiment.

Overall, the current correction is still ongoing. We highlight that the 14-day RSI indicator is also situating below the 50-pt neutral level at 40.44 pts – an indication that market sentiment is weak. Moreover, the index continued being pressed below the 20-day SMA line points towards a negative outlook. These bearish indicators enhance our downside view.

We revise the immediate support to 3,191 pts, ie the low of 9 Jul’s “Bullish Harami” pattern. The following support is at 3,113 pts, located at 19 Apr 2017’s low. Conversely, our immediate resistance is now at 3,296 pts, derived from the high of 27 Jun. This is followed by the 3,338-pt resistance, obtained from the low of 4 Apr.

Source: RHB Securities Research - 13 Jul 2018