Stay long, with a new trailing-stop set below the 27,989-pt level. The upward movement of the HSIF continued as expected, as a white candle was formed yesterday. It closed at 28,932 pts, off its high of 29,054 pts and low of 28,478 pts. From a technical perspective, the upside move is likely to continue, as the index has taken out the previously-indicated 28,688-pt resistance. We view yesterday’s candle as a continuation of the buyers extending the rebound from 13 Jun’s “Hammer” pattern. Overall, we keep our bullish view on the HSIF’s outlook.

Currently, the immediate support is seen at 27,989 pts, which was determined from 26 Jun’s low. If the price breaks down, look to 26,702 pts – the low of 13 Jun’s “Hammer” pattern – as the next support. Towards the upside, the immediate resistance is anticipated at 29,400 pts – this is situated near the midpoint of 6 May’s long black candle. The next resistance will likely be at 30,336 pts, ie the previous high of 15 Apr.

To recap, on 12 Jun, we initially recommended traders to initiate long positions above the 27,436-pt level. We continue to advise them to stay long for now while setting a new trailing-stop below the 27,989-pt threshold to lock in a larger part of the profits.

Source: RHB Securities Research - 3 Jul 2019