The bullish bias since early July stays intact, keep long. No change was observed in the SGX FTSE China A50, as yesterday’s close was at the same closing level as the prior session’s, ie 11,270 pts. The index left a “Doji” candlestick pattern after having oscillated between a low of 11,182.50 pts and high of 11,310 pts. This implied that neither bulls nor bears were able to take firm control at the end of the day. We do not see any strong selling activities currently and the SGX FTSE China A50 continues to trade steadily above 10,745 pts – indicating that the bullish bias since early July remains in play, which enhances our positive view.

The daily chart suggests that opportunities are still leaning more towards the buyers. At this juncture, it is best that traders maintain long positions, with a cut-loss pegged below the 10,745-pt threshold. This is in order to minimise the trading risk. Recall that our long call was initially made on 23 Jul, following a breach above the 11,570-pt mark.

To the downside, the immediate support is at 11,150 pts, or the low of 20 Jul. This is followed by the next support at 10,745 pts, which was the low of 3 Jul’s “Bullish Harami” pattern. Conversely, we set the immediate resistance at 11,570 pts, ie the high of 29 Jun. The next resistance is pegged at the 12,007-pt mark, which is located at the high of 25 Jul.

Source: RHB Securities Research - 4 Sept 2018