Outlook remains positive; stay long. The HSIF formed a black candle yesterday. It closed at 26,302 pts, off its high of 26,738 pts and low of 26,164 pts. Still, yesterday’s black candle can be interpreted as a result of profittaking activities following the recent surge. From a technical viewpoint, the 21-day SMA line is still edging upwards, suggesting that the upward momentum is not over yet. Overall, we think that the market sentiment would stay positive, as long as the recent low of 24,876-pt support is not violated at the closing.

As seen in the chart, we maintain the immediate support level at the 26,000-pt psychological mark. If this level is taken out, look to 24,876 pts – which was the low of 3 Jan’s “Bullish Harami Cross” pattern – as the next support.

On the other hand, the immediate resistance level is now seen at 26,746 pts, ie the high of 11 Jan. Meanwhile, the next resistance would likely be at 27,329 pts, obtained from the high of 4 Dec 2018.

Hence, we advise traders to stay long, since we had originally recommended initiating long above the 26,000-pt level on 10 Jan. In the meantime, a stop-loss can be set below the 24,876-pt threshold in order to minimise the downside risk.