May increase once the breather below 3,338 pts ends. The FSSTI shed 3.63 pts to close at 3,243.92 pts yesterday. A black candle was formed after the index oscillated between a low of 3,239.44 pts and high of 3,256.61 pts, implying that the momentum seen in the prior two sessions did not continue. However, we make no change to our positive view, as the index continues to hover above the 3,191-pt mark. At this juncture, the bullish bias in the “Bullish Harami” candlestick pattern is still in play.

Looking forwards, we believe that the upside movement could still be extended once the breather below the 3,338-pt level is taken out. This is also supported by the appearance of last month’s “Bullish Divergence RSI” reversal pattern, suggesting a change of trend towards upside from downside.

The immediate support is maintained at 3,191 pts, which was the low of 9 Jul’s “Bullish Harami” pattern. The following support is set at 3,113 pts, located at the low of 19 Apr 2017. Conversely, our immediate resistance is pegged at 3,274 pts, derived from the high of 10 Jul. Should the FSSTI breach above this level, look for 3,338 pts, ie 4 Apr’s low, as our next resistance.

Source: RHB Securities Research - 30 Aug 2018