Maintain long positions. The HSIF formed a black candle on Tuesday. It closed at 29,468 pts, off its high of 29,681 pts and low of 29,368 pts. Still, it is not surprising that the market is experiencing profit-taking activities following the recent gains. On a technical basis, the bullish sentiment stays intact. This is given that the index did not erase more than 50% of the gains from 1 Apr’s long white candle. Overall, we think the market rebound that started from early-January is not over yet.

According to the daily chart, we anticipate the immediate support at 29,300 pts – this is set near the midpoint of 1 Apr’s long white candle. If a breakdown arises, the next support is maintained at 28,410 pts, which was the previous low of 26 Mar. On the other hand, the immediate resistance is seen at 30,336 pts, ie the high of 15 Apr. Meanwhile, the next resistance will likely be at 31,544 pts, which was obtained from the previous high of 7 Jun 2018.

Therefore, we advise traders to maintain long positions – this follows our recommendation of initiating long above the 29,039-pt level on 20 Mar. A trailing-stop can be set below the 29,300-pt threshold to minimise the risk per trade.

Source: RHB Securities Research - 2 May 2019