Stay long while setting a new trailing-stop below the 28,563-pt support. The HSIF ended lower to form a black candle yesterday. It closed at 28,723 pts, off the session’s high of 29,093 pts. On a technical basis, yesterday’s black candle can be viewed as a result of profit-taking activities following the recent gains seen lately. We believe the buyers may continue to control the market as long as the HSIF still trades above the rising 21-day SMA line. Overall, we keep our positive view on the HSIF’s outlook.

As seen in the chart, we now eye the immediate support at 28,563 pts – this was determined from the low of 28 Feb. Meanwhile, the next support is anticipated at 27,450 pts, ie the previous low of 8 Feb. Towards the upside, the immediate resistance is seen at 29,255 pts, which was the high of 4 Mar. If a breakout arises, the next resistance is maintained at the 30,000-pt psychological spot.

Consequently, we advise traders to maintain long positions – this follows our recommendation of initiating long above the 26,000-pt level on 10 Jan. For now, to lock in a larger part of the gains, a new trailing-stop can be set below the 28,563-pt threshold.

Source: RHB Securities Research - 8 Mar 2019