Near 1-month bullish bias remains intact. Yesterday’s session was led by the bears, as the FSSTI posted a 42.63-pt loss to close at 3,286.32 pts. A black candle was formed after it hovered between a low of 3,278.84 pts and high of 3,329.19 pts. However, as long as the index is able to hold above 3,191 pts, this implies that the bulls are still in control of the market. Technically speaking, the bullish bias in 9 Jul’s “Bullish Harami” candlestick pattern is still exerting itself. Looking forward, we think that the near 1-month upside move could still be extended once the breather below 3,338 pts ends.

The current technical landscape suggests that market sentiment is still promising. We also highlight that the “Bullish Divergence RSI” reversal pattern, which suggests that the trend has turned towards the upside, from downside. At this juncture, we make no change to our positive view.

We set the immediate support at 3,274 pts, obtained from the high of 10 Jul. In the event that this level is taken out, the next support is at 3,191 pts, the low of 9 Jul’s “Bullish Harami” pattern. Conversely, the immediate resistance is maintained at 3,338 pts, or the low of the 4 Apr. The following resistance is pegged at the 3,417-pt threshold, ie 1 Jun’s low.

Source: RHB Securities Research - 3 Aug 2018