Market sentiment remains encouraging above 13,649 pts, the positive outlook continues. The FBMSC ended last Thursday at 14,453.18 pts and posted a 248.75 pts loss. As a result, the index left a black candle that breached below the previous 14,578-pt support and 50-day SMA line. This weak performance marks five consecutive declines, sending the FBMSC to its near 6-week low. However, we make no change to our positive view. This is because the index has – overall – managed to stay above 13,649 pts. This is an indication that the bullish bias we saw since early April has not reached its end yet.

At this juncture, we believe the bulls are still dominating market sentiment. We highlight the meaningful “Triple Bottom” and “Bullish Divergence RSI” reversal patterns in July. These positive indicators suggest that the trend has turned to the upside from downside, thereby enhancing our positive view.

Our immediate support is now at 13,649-pt mark, which was the low of 30 May. This following support is set at 13,116 pts – derived from the low of 25 Aug 2015. Conversely, we set the immediate resistance at 15,188 pts, or the high of 17 Apr. This is followed by the next resistance at the 15,188-pt threshold, which is located at the high of 17 Apr.

Source: RHB Securities Research - 3 Sept 2018