Initiate long positions above the 29,039-pt level. The HSIF ended higher to form another white candle yesterday. It rose to a high of 29,541 pts during the intraday session, before ending at 29,494 pts for the day. As the index is hitting its highest point in nearly nine months and closed above the previously-indicated 29,255-pt resistance, this indicates that market sentiment is turning positive. The latest candle can be viewed as a continuation of bulls extending the rebound from the recent low of 11 Mar. Meanwhile, 18 Mar’s closing has also triggered our stop-loss, which we had previously recommended at the 29,255-pt threshold.

Based on the daily chart, we are eyeing the immediate support at 29,039 pts, determined from the low of 18 Mar’s long white candle. The next support is seen at 28,016 pts, ie the previous low of 11 Mar. Towards the upside, we now anticipate the immediate resistance at the 30,000-pt psychological mark. If a decisive breakout arises, look to 31,544 pts – which was the previous high of 7 Jun 2018 – as the next resistance.

Hence, we advise traders to initiate long positions above the 29,039-pt level. A stop-loss is preferably set below the 28,016-pt threshold in order to minimise downside risk.

Source: RHB Securities Research - 20 Mar 2019