The positive view remains in play above 13,649 pts. The FBMSC closed yesterday’s session at 14,942.99 pts, ie 153.60 pts lower from its prior close of 15,096.59 pts. It left a black candle after oscillating between a low of 14,924.32 pts and high of 15,081.56 pts, which implied that the session was led by the bears. Nevertheless, we make no change to our positive view, given that no strong downside development has been sighted yet. Overall, the bulls continue to dominate market sentiment.

As long as the index is able to stay above the 13,649-pt support, this implies that the bullish bias since early April continues to exert itself. Our upside view is also supported by the appearance of last month’s meaningful “Triple Bottom” and “Bullish Divergence RSI” reversal patterns, which suggests the trend has shifted towards upside from downside.

There is no change to our immediate support at 14,578 pts, which was the high of 14 Jun. If this level is taken out, the next support is found at the 13,649-pt threshold, ie the low of 30 May. Towards the upside, we keep the immediate resistance at 15,188 pts, or 17 Apr’s high. This is followed by the next resistance at the 16,000-pt mark, which is near the low and high of 9 Feb and 12 Mar.

Source: RHB Securities Research - 14 Aug 2018