Ongoing positive indicator suggests more potential upside movement. The FSSTI climbed 1.77 pts and ended yesterday’s session at 3,328.60 pts. It formed a “Doji” candlestick pattern, which implies that the session was an indecisive one. Presently, our positive view remains intact, with the positive momentum likely to extend further. This is especially when market sentiment is encouraging, given that the 14-day RSI indicator is above the 50-pt neutral level at 56.44 pts.

The daily chart above suggests that the bullish bias in the appearance of 9 Jul’s “Bullish Harami” candlestick pattern continues to exert itself. Furthermore, the “Bullish Divergence RSI” signals a potential turnaround towards the upside. All these positive indicators support our upside view.

Towards the downside, our immediate support is at 3,296 pts, which was the high of 27 Jun. The next support is found at the 3,191-pt threshold, obtained from the low of 9 Jul’s “Bullish Harami” pattern. Conversely, we set the immediate resistance at 3,338 pts, derived from 4 Apr’s low. If this level is taken out, the following resistance is pegged at 3,417 pts, ie 1 Jun’s low.

Source: RHB Securities Research - 27 Jul 2018