Our positive view remains valid above the 13,649-pt mark. After the appearance of 12 Jul’s reversal “Bullish Engulfing” candlestick pattern, the FBMSC jumped 161.50 pts to 14,074.33 pts last Friday. This showed a positive continuation of the bullish bias we detected in the prior session. At this juncture, the bulls are still dominating market sentiment above the 13,649-pt support. Should we see a strong climb in the coming sessions, we believe this will lead to the formation of a meaningful “Triple Bottom” bullish reversal pattern.

As long as the abovementioned 13,649-pt level is not taken out, we deem the upside development we have seen since early April as still in play. Above this level, we highlight a few reversal patterns: 5 Apr’s “Bullish Harami”, 6 Apr’s “Hammer”, 1 Jun’s “Bullish Engulfing”, and 12 Jul’s “Bullish Engulfing”. These positive indicators suggest that the bulls are resilient. Overall, our 3-month bullish view remains intact.

We keep the 13,649-pt mark, ie 30 May’s low, as our immediate support. Following this level is the 13,116-pt support, which was derived from the low of 25 Aug 2015. Towards the upside, the immediate resistance is maintained at 14,578 pts, or 14 Jun’s high. If this level is taken out, the next resistance is found at 15,188 pts, which was 17 Apr’s high.

Source: RHB Securities Research - 16 Jul 2018