The 1-month bullish view remains in play above 3,191 pts. The FSSTI dipped 41.96 pts to close at 3,284.78 pts last Friday. It charted a black candle after oscillating between a low of 3,273.57 pts and high of 3,296.08 pts. This weak performance led the index to close below the 20-day SMA line. Despite the decline, we make no change to our positive view, as the FSSTI is still holding above 3,191 pts. As long as this level is not taken out, we believe that the bullish bias in the appearance of the “Bullish Harami” candlestick pattern on 9 Jul remains intact.

At this juncture, the 1-month upside development has not been fully negated yet. Our positive view is also supported by the appearance of the “Bullish Reversal RSI” reversal pattern on last month, which implies that the trend has changed towards upside from downside.

Our immediate support is maintained at 3,274 pts, the high of 10 Jul. Should the FSSTI slip below this level, our next support is found at 3,191 pts, or the low of 9 Jul’s “Bullish Harami” pattern. On the flip side, we keep the immediate resistance at 3,338 pts, which was the low of the 4 Apr. For the next resistance, look to 3,417 pts, ie 1 Jun’s low.

Source: RHB Securities Research - 13 Aug 2018