Market is hitting its 9-month high; stay long. The HSIF’s upward momentum continued as expected yesterday after it successfully ended higher to form another white candle. It closed at 29,739 pts, off its high of 29,749 pts and low of 29,565 pts. As the index has taken out the 29,630-pt resistance mentioned previously, this can be viewed as the bulls extending their buying momentum. In view of the fact that the HSIF has marked a highest close in more than nine months, this is an indication that the rebound that began in early-January may persist.

Based on the current outlook, we are now eyeing the immediate support at 28,410 pts – this was obtained from the low of 26 Mar. The next support is maintained at 27,450 pts, which was the low of 8 Feb. On the other hand, we anticipate the immediate resistance at the 30,000-pt psychological mark. If this level is taken out, look to 31,544 pts – determined from the previous high of 7 Jun 2018 – as the next resistance.

Consequently, we advise traders to stay long – in line with our initial recommendation to have long positions above the 29,039-pt level on 20 Mar. For now, a new trailing-stop set below the 28,410-pt threshold is advisable to minimise the risk per trade.

Source: RHB Securities Research - 3 Apr 2019