Bullish trend remains unchanged; stay long. The upward momentum of the HSIF continued as expected, as a white candle was formed yesterday. It settled at 28,885 pts, after hovering between a high of 29,255 pts and low of 28,642 pts. On a technical basis, market sentiment is still considered bullish, as the index has posted a white candle for the second consecutive session. This may further extend the upside swing that started with 3 Jan’s “Bullish Harami” pattern. Overall, we keep our positive view on the HSIF’s outlook.

Based on the daily chart, the immediate support level is seen at 28,038 pts, ie the low of 20 Feb. If this level is taken out, look to 27,450 pts – which was the previous low of 8 Feb – as the next support. To the upside, we now anticipate the immediate resistance level at 29,255 pts, situated at the high of 4 March. If a breakout arises, the next resistance is maintained at the 30,000-pt psychological mark.

Therefore, we advise traders to maintain long positions, in line with our initial recommendation to have long positions above the 26,000-pt level on 10 Jan. A trailing-stop can be set below the 28,038-pt threshold in order to lock in part of the profits.

Source: RHB Securities Research - 5 Mar 2019