Stay long. The HSIF formed another “Doji” candle yesterday. It settled at 27,552 pts, after oscillating between a high of 27,666 pts and a low of 27,375 pts throughout the session. However, again, the positive sentiment stays intact. This is as 29-30 Jan’s candles can only be viewed as buyers probably taking a breather after the recent surge. Given that the HSIF is still trading above the rising 21-day SMA line and the 26,764-pt support mentioned previously, this implies that the rebound that began from 3 Jan’s “Bullish Harami Cross” pattern may carry on. Overall, we remain upbeat in our outlook.

As seen in the chart, the immediate support level is seen at 26,764 pts, which was the low of 18 Jan. If this level is taken out, the next support is anticipated at the 26,000-pt psychological mark. To the upside, we are eyeing the resistance level at 28,037 pts, obtained from the previous high of 26 Sep 2018. This is followed by 28,574 pts – situated at the high of 30 Aug 2018.

Hence, we advise traders to stay long, following our recommendation of initiating long above the 26,000-pt level on 10 Jan. A trailing-stop can be set below the 26,764-pt threshold in order to secure part of the profits.

Source: RHB Securities Research - 31 Jan 2019