Stay long, with a new trailing-stop set below the 27,450-pt support. The HSIF’s upside strength continued as expected after it ended higher to form a white candle yesterday. It rose 276 pts to settle at 28,400 pts. As the index has successfully taken out the 28,200-pt resistance mentioned previously and hit its 5-month high, this can be viewed as the buyers extending their buying momentum. Furthermore, as the HSIF has marked a higher close above the rising 21-day SMA line, the bullish sentiment stays intact.

Presently, the immediate support level is seen at 27,450 pts, determined from the low of 8 Feb. The next support would likely be at 26,835 pts, ie the low of 22 Jan. On the other hand, the near-term resistance level is anticipated at 28,574 pts, which was the high of 30 Aug 2018. This is followed by 29,113 pts, obtained from the previous high of 26 Jul 2018.

To re-cap, on 10 Jan, we initially recommended traders initiate long positions above the 26,000-pt level. We continue to advise them to stay long for now, while setting a new trailing-stop below the 27,450-pt threshold. This is in order to lock in a larger part of the profits.

Source: RHB Securities Research - 14 Feb 2019