The positive view remains in play above the 13,649 level. The FBMSC dropped 134.94 pts to 14,672.74 pts yesterday. As a result, a black candle was formed after the index oscillated between a low of 14,643.12 pts and high of 14,807.68 pts. This is an extension of the bearish bias we saw in 26 Jul’s “Bearish Engulfing” candlestick pattern. However, as long as the FBMSC is able to stay above 13,649-pt mark, we deem the bullish bias that started since early April as still in play. This is especially after the appearance of the meaningful “Triple Bottom” reversal pattern – an indication that the bulls are in control of market sentiment.

There is no change to our positive view. Based on the current technical landscape, we believe the index may still continue to soar in later sessions. Our upside view is also supported by the appearance of the “Bullish Divergence RSI” indicator, which suggests the trend has changed to the upside from the prior downside.

We keep the immediate support at 14,578 pts, ie the high of 14 Jun. If this level is taken out, the next support is seen at 13,649 pts, which was located at the low of 30 May. On the flip side, the immediate resistance is maintained at 15,188 pts, or 17 Apr’s high. The following resistance is pegged at the 16,000-pt threshold, which was near the low and high of 9 Feb and 12 Mar.

Source: RHB Securities Research - 3 Aug 2018