The near 3-month upside development remains in play above the 3,191-pt support. Last Friday was a bearish session for the FSSTI, as it ended at 3,213 pts and registered a 36.89-pt loss. The index formed a black candle after oscillating between a low of 3,211.48 pts and high of 3,239.47 pts. This shows no continuation of the momentum we saw in the prior session. Nevertheless, this does not negate our positive view, given that the index has managed to stay above the 3,191-pt support. As long as this level is not taken out, we believe that the bullish bias in 9 Jul’s “Bullish Harami” candlestick pattern remains intact.

The current technical landscape suggests that the near 3-month upside development has not reached its limit yet. For the record, our upside view is also supported by the “Bullish Divergence RSI” on last month, suggesting that the trend has changed from downside towards upside.

Our immediate support is maintained at 3,191 pts, which was the low of 9 Jul’s “Bullish Harami” pattern. In the event that this level is taken out, the next support is found at 3,113 pts, obtained from the low of 19 Apr 2017. Conversely, we set the immediate resistance at 3,274 pts, located at the high of 10 Jul. For the next resistance, look to 3,338 pts, ie 4 Apr’s low.

Source: RHB Securities Research - 27 Aug 2018