Bullish indicators support our positive view. The FBMSC rose by 107.24 pts to 14,984.35 pts yesterday. It left a white candle and is currently headed north near the 15,188-pt resistance. The index has been increasing nonstop for 10 sessions in a row now. Without any sign of a slowdown, we believe the positive performance could still be extended further. The fact that the FBMSC is now hovering firmly above the 50-day SMA line points towards a bullish outlook.

Overall, the bulls are in firm control of market sentiment. The new appearance of the meaningful “Triple Bottom” pattern suggests a high possibility that the recent downtrend has reached its end. In addition, we also highlight a “Bullish Divergence RSI” in the daily chart, which implies the trend is turning upwards from downwards. All these positive indicators support our upside view.

Presently, we keep the immediate support at 14,578 pts, which is located at 14 Jun’s high. This is followed by the next support at 13,649 pts, or the low of 30 May. On the flip side, the immediate resistance is pegged at 15,188 pts, or the high of 17 Apr. The next resistance is maintained at the 16,000-pt threshold, ie near the low and high of 9 Feb and 12 Mar.

Source: RHB Securities Research - 26 Jul 2018