Bullish indicators support our positive view. Today we use the weekly chart to analyse the FSSTI. Presently, it is testing the 3,338-pt resistance level. Based on the immediate momentum, chances are high that it will breach this point, in the coming sessions. Technically, the bulls are back in control of market sentiment. This is given the appearance of the “Bullish Harami” candlestick pattern, followed by the positive follow-through over the last one month. Our outlook remains positive as well.

Looking at the current technical landscape, the upside movement could still be extended further. This is also supported by the fact that the index is now hovering steadily above the 100-week SMA line, which points towards a positive outlook.

To the downside, our immediate support is maintained at 3,274 pts, the high of 10 Jul. This is followed by the next support at the 3,191-pt threshold, or the low of 9 Jul’s “Bullish Harami” pattern. On the flip side, we set the immediate resistance at 3,338 pts, obtained from the low of the 4 Apr. For the next resistance, look to 3,417 pts, ie 1 Jun’s low.

Source: RHB Securities Research - 10 Aug 2018