Near-term upside move remains intact, stay long. The HSIF’s upside momentum continued as expected, as another white candle was formed yesterday. It closed at 31,201 pts, off its high of 31,277 pts and low of 30,946 pts. From a technical perspective, the index has marked a higher close vis-à-vis the previous sessions since 4 Jun, implying that the upward movement is likely to continue. Moreover, this movement may further extend the rebound that started with 31 May’s “Bullish Engulfing” pattern. Overall, we stay bullish on our near-term outlook.

According to the daily chart, the immediate support is seen at 30,650 pts – this is set near the midpoint of 4 Jun’s long white candle. The next support is likely to be at 29,847 pts, or the low of 31 May’s “Bullish Engulfing” pattern. Towards the upside, we are eyeing the immediate resistance at 31,499 pts, which was determined from the high of 15 May. Meanwhile, the next resistance is maintained at the 32,000-pt round figure – this is also situated near the high of 21 Mar.

Thus, we advise traders to maintain long positions, in line with our initial recommendation to have long positions above the 30,650-pt level on 5 Jun. It is advisable to set a stop-loss below the 29,847-pt threshold in order to limit the risk per trade.

Source: RHB Securities Research - 7 Jun 2018