The upside view stays intact, in line with the bullish bias above 13,649 pts. The FBMSC dropped 185.06 pts to 14,268.12 pts on Monday and left a black candle. This shows the continuation of the bearish bias we saw in the prior session. As a result, the index dipped to its 6-week low. We also highlight a “Downside Gap” pattern, which suggests the correction is likely to extend further. However, as long as the FBMSC is able to stay above the 13,649-pt mark, we believe the upside development that started since early April has not been fully negated yet.

We initially saw an early signal that the recent downtrend has found bottom – this was after the appearance of 5 Apr’s “Bullish Harami” candlestick pattern. This bullish view was then supported by the meaningful “Triple Bottom” and “Bullish Divergence RSI” reversal patterns observed in July, which suggest that the trend has shifted towards the upside from downside.

We set the immediate support at 13,649 pts, which is located at the low of 30 May. For the next support, look to 13,116 pts, or 25 Aug 2015’s low. Towards the upside, our immediate resistance is pegged at 15,188 pts, which was derived from the high of 17 Apr. If this level is taken out, the following resistance is set at 15,188 pts, ie the high of 17 Apr.

Source: RHB Securities Research - 4 Sept 2018