Bullish trend likely to continue; stay long. Yesterday, the HSIF’s upward momentum continued as expected, after it formed another white candle. It closed at 30,003 pts, after hovering between a high of 30,131 pts and low of 29,810 pts. From a technical perspective, the bullish trend is likely to persist, as the index has marked higher closes accordingly since 26 Mar. Furthermore, as the index has closed above the 30,000-pt threshold, this also implies a bullish outlook sentiment. Overall, we think the upside swing, which started in early January, may continue.

Based on the daily chart, we are eyeing the immediate support level at 28,410 pts, determined from the previous low of 26 Mar. The next support is seen at 27,450 pts, ie the low of 8 Feb. On the other hand, we now anticipate the immediate resistance level at the 31,000-pt round figure. If a breakout occurs, the next resistance is maintained at 31,544 pts, obtained from the previous high of 7 Jun 2018.

Hence, 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. A trailing-stop can be set below the 28,410-pt mark in order to limit the downside risk.

Source: RHB Securities Research - 5 Apr 2019