Maintain long positions. The upward movement of the HSIF continued as expected, as a white candle was formed yesterday. It rose to a high of 28,519 pts during the intraday session, before ending at 28,515 pts for the day. From a technical perspective, the rebound is likely to continue, as the index posted a fourth consecutive white candle. We view yesterday’s higher close as a continuation of buyers extending the rebound from 13 Jun’s “Hammer” pattern. Overall, we keep our bullish view on the HSIF’s outlook.

As seen in the chart, we anticipate the immediate support at 27,700 pts, set near the midpoint of 19 Jun’s long white candle. The next support is seen at 26,702 pts, ie the low of 13 Jun’s “Hammer” pattern. To the upside, the immediate resistance is maintained at 28,798 pts, which was the high of 9 May. Meanwhile, the next resistance is situated at 29,400 pts, situated near the midpoint of 6 May’s long black candle.

Therefore, we advise traders to stay long, since we had originally recommended initiating long above the 27,436- pt level on 12 Jun. In the meantime, a trailing-stop can be set below the 26,702-pt threshold in order to limit downside risk.

Source: RHB Securities Research - 21 Jun 2019