Ongoing bullish bias points to a positive view. After two bearish performances in a row, the FSSTI rebounded by 19.61 pts to close at 3,285.34 pts. As a result, the index returned above the previous 3,274-pt resistance level. Presently, there is no strong downside development occurring in the daily chart above. This implies that the bulls are still dominating market sentiment. Based on the current technical landscape, we believe that the upside development could still be extended in the later sessions. Overall, our positive review remains in play.

The bullish bias in the “Bullish Harami” candlestick pattern on 9 Jul continues to exert itself. This implies a positive outlook. In addition, we saw a “Bullish Divergence RSI” reversal pattern, suggesting that the trend has shifted from downside towards upside. All these indicators support our positive view.

Thus, our immediate support is now at 3,274 pts, the high of 10 Jul. The next support is at the 3,191-pt mark, or the low of 9 Jul’s “Bullish Harami” pattern. On the flip side, we set the immediate resistance at 3,338 pts, the low of the 4 Apr. This is followed by the 3,417-pt resistance, obtained from the low of 1 Jun.

Source: RHB Securities Research - 7 Aug 2018