Upside movement may still extend once the breather below 15,188 pts ends. There was no continuation of the positive momentum we saw in the prior session, as the FBMSC slipped 164.95 pts to 14,276.34 pts yesterday. It left a black candle after oscillating between a low of 14,241.12 pts and high of 14,463.90 pts. Nevertheless, as long as the index is able to hold above 13,649 pts, we believe that the bullish bias since April remains firmly in play. From our technical perspective, the upside movement could still be extended once the normal breather below the 15,188-pt mark ends.

Overall, it is the bulls that are in control of market sentiment. We initially saw an early development of the bullish bias after the appearance of 5 Apr’s “Bullish Harami” candlestick pattern. This positive view was then supported by the meaningful “Triple Bottom” and the “Bullish Divergence RSI” reversal patterns – an indication that the trend has shifted towards the upside from downside.

We set the immediate support at 13,649 pts, which was the low of 30 May. The next support is pegged at the 13,116-pt mark, or the low of 25 Aug 2015. On the flip side, our immediate resistance is set at 15,188 pts, ie 17 Apr’s high. Should the FBMSC breach above this line, the following resistance is found at the 15,188-pt threshold, which is located at the high of 17 Apr.

Source: RHB Securities Research - 6 Sept 2018