Indecisive but one-month momentum still in play, says RHB of FBM Small Cap Index


RHB FBMSC chartRHB Retail Research, in a technical analyzer update to investors on 10 June, believes that “1-month positive development stays intact” despite conceding that a “Doji” candlestick pattern has formed as a result of the FBM Small Cap Index having opened and closed at the same level of 15,450.79 pts on 9 June (when the FBMSC inched slightly higher by 6.86 pts).

The “Doji” candlestick pattern, it added, pointed to indecisiveness at the end of the day.

“Nevertheless, as the index managed to stay firmly above the 15,176-pt level, this indicates that the 1-month bullish momentum is still in play. Note that the FBMSC has returned back above the 100-day SMA line on 7 Jun, which points towards a positive sentiment,” said the report.

“Based on the daily chart above, we believe that the steady near 2-week positive momentum is good. Furthermore, we highlight that the RSI indicator has not yet hit the 70-pt overbought level. From a technical perspective, this suggests that the room for the bulls to develop momentum is still there,” it added.

“The immediate support stays at 15,406 pts, obtained from the low of 25 Mar. This is followed by the critical support at the 15,176-pt threshold, located at the low of the “Bullish Piercing Line” pattern.

“On the flip side, we keep the immediate resistance at the 15,588-pt mark, ie 18 Apr’s low. The next critical resistance is kept at the 15,812-pt mark, located at the high of 25 April,” it concluded.

Note: This is not a recommendation to buy or sell stocks. Please consult your stockbroker and/or financial advisor before making any investment decision.

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