Market sentiment is considered bullish; stay long. The HSIF’s upside strength continued as expected after it ended higher to form another white candle. It rose to a high of 30,295 pts during the intraday session, before ending at 30,204 pts for the day. As the index has successfully posted a positive candle for the ninth consecutive session, this can be viewed as the bulls extending their buying momentum. Furthermore, as the 21-day SMA line is likely to turn higher, this indicates that market sentiment remains bullish.

As seen in the chart, the immediate support is seen at 28,410 pts, ie the previous low of 26 Mar. If a breakdown arises, look to 27,450 pts – determined from the low of 8 Feb – as the next support. Towards the upside, we are eyeing the resistance at the 31,000-pt round figure. This is followed by 31,544 pts, which was the previous high of 7 Jun 2018.

Therefore, we advise traders to maintain long positions, since we initially recommended initiating long above the 29,039-pt level on 20 Mar. A trailing-stop can be set below the 28,410-pt level to limit the downside risk.

Source: RHB Securities Research - 10 Apr 2019