The positive view continues, as the bullish bias may still be extended. The FBMSC ended last Friday’s session at 14,870.64 pts, which was 11.88 pts lower from its prior close of 14,882.52 pts. However, this does not negate our positive view, as no strong retracement has occurred yet. As a result, the bearish bias in the appearance of 26 Jul’s “Bearish Engulfing” candlestick pattern remains unconfirmed. Overall, we believe the bulls are still dominating market sentiment, as the index continues to hover steadily above the 50-day SMA line, which points towards a positive outlook.

It is normal to see for the breather to occur, especially after the FBMSC recently posted 10 increases in a row. Looking forwards, we believe the bullish bias may still be extended further. Our positive view is also supported by the meaningful “Triple Bottom” reversal pattern, which suggests the trend is shifting towards the upside from downside previously.

We keep the immediate support at 14,578 pts, which was derived from 14 Jun’s high. If this level is taken out, the following support is found at 13,649 pts – located at 30 May’s low. On the flip side, our immediate resistance is set at 15,188 pts, or the high of 17 Apr. This is followed by the next resistance at the 16,000-pt mark, or the near the low and high of 9 Feb and 12 Mar.

Source: RHB Securities Research - 30 Jul 2018