Ongoing positive view remains intact above 13,649 pts. Yesterday, the FBMSC ended the session at 14,148.54 pts and posted a 27.31-pt increase. This has marked the third climb in a row since the appearance of 12 Jul’s “Bullish Engulfing” candlestick pattern. Based on the immediate performance, we think that there is more potential upside bullish follow-through in the coming sessions. This is supported by the appearance of the “Upside Gap” continuation pattern on 13 Jul, which suggests likelihood for further increase. Overall, our 3-month positive view remains intact above 13,649 pts.

In terms of strength, the 14-day RSI indicator suggests that market sentiment is encouraging at 52.19 pts, ie above the 50-pt neutral level. Should a strong upside development occur, we believe this will lead to a formation of the meaningful bullish reversal “Triple Bottom” pattern.

The immediate support is maintained at 13,649 pts, which is located at the low of 30 May. This is followed by the following support at the 13,116-pt threshold, which was derived from the low of 25 Aug 2015. On the flip side, we set the immediate resistance at 14,578 pts, or the high of 14 Jun. The next resistance is kept at 15,188 pts, ie the high of 17 Apr.

Source: RHB Securities Research - 18 Jul 2018