Maintain long positions. The HSIF ended higher to form a white candle last Friday. It settled at 29,950 pts, off its high of 29,991 pts and low of 29,706 pts. Based on the current outlook, the index has been able to stay above the previously-indicated 28,410-pt support for nearly three weeks, which implies that the buyers are still in control of the market. With the 21-day SMA line still pointing upwards, this leads us to believe the uptrend that began in early-January may continue. Overall, we remain bullish on the HSIF’s outlook.

According to the daily chart, we maintain the immediate support at 28,410 pts – this was obtained from the previous low of 26 Mar. The next support will likely be at 27,450 pts, ie the low of 8 Feb. To the upside, the immediate resistance is now anticipated at 30,295 pts, which was determined from the high of 9 Apr. If a breakout arises, the next resistance is seen at 31,544 pts, ie the previous high of 7 Jun 2018.

Hence, we advise traders to maintain long positions, given that we previously recommended initiating long above the 29,039-pt level on 20 Mar. In the meantime, a trailing-stop can be set below the 28,410-pt mark to minimise the risk per trade.

Source: RHB Securities Research - 15 Apr 2019