Positive view remains in play. The FSSTI rose 9.10 pts to 3,328.95 pts yesterday. This shows a positive continuation of the bullish bias we saw in the prior session. The current technical landscape indicates that the index is still headed north. Based on the immediate view, chances are high that we could see more upside movement in the later sessions. This is especially when the 14-day RSI indicator is hovering above the 50-pt neutral level at 56.16 pts – an indication that market strength is present. Note that the FSSTI is currently situated above the 20-day SMA line. This implies a positive outlook, thereby enhancing our bullish view.

Since the appearance of the “Bullish Harami” candlestick pattern on 9 Jul, the bullish bias has continued to exert itself. From our technical viewpoint, we think that the index is on a fresh upside move. This is also supported by the “Bullish Divergence RSI” indicator, which suggests that the trend has shifted towards north, from south.

Our immediate support is maintained at 3,274 pts, which was the high of 10 Jul. This is followed by the 3,191-pt support threshold, or the low of 9 Jul’s “Bullish Harami” pattern. On the flip side, we keep the immediate resistance at 3,338 pts, located at the low of the 4 Apr. The next resistance is kept at the 3,417-pt threshold, or the low of 1 Jun.

Source: RHB Securities Research - 2 Aug 2018