Bullish trend remains intact, stay long. Upside strength in the HSIF continued as expected, as a white candle was formed yesterday. It rose to a high of 29,086 pts during the intraday session, before ending at 29,029 pts for the day. Technically speaking, the index has marked a higher close vis-à-vis the previous sessions since 1 Mar. This indicates the rebound, which started from 3 Jan’s “Bullish Harami” pattern, may continue. Moreover, the 14- day RSI indicator is rising higher without being overbought, improving the bullish sentiment. Overall, we stay bullish on the HSIF’s outlook.

Based on the daily chart, the immediate support is seen at 28,038 pts, ie the low of 20 Feb. The next support will likely be at 27,450 pts, which was the previous low of 8 Feb. To the upside, we anticipate the immediate resistance at 29,255 pts – this was obtained from the high of 4 Mar. Meanwhile, the next resistance is maintained at the 30,000-pt psychological mark.

Consequently, we advise traders to stay long, 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 mark in order to secure part of the gains.

Source: RHB Securities Research - 7 Mar 2019