Stay long. The HSIF formed a “Doji” candle yesterday. It settled at 28,926 pts, after hovering between a high of 28,992 pts and low of 28,766 pts. However, the bullish sentiment stays intact. This is as yesterday’s “Doji” candle can only be viewed as buyers probably taking a pause after the recent surge. Given that the HSIF is still trading above the rising 21-day SMA line and the 27,989-pt support mentioned previously, this implies that the rebound that began from 13 Jun’s “Hammer” pattern may carry on. Overall, we remain upbeat in our outlook.

As seen in the chart, we are eyeing the immediate support level at 27,989 pts, obtained from the low of 26 Jun. The next support would likely be at 26,702 pts, ie the low of 13 Jun’s “Hammer” pattern. On the other hand, we anticipate the immediate resistance level at 29,400 pts, set near the midpoint of 6 May’s long black candle. Meanwhile, the next resistance is seen at 30,336 pts, which was the previous high of 15 Apr.

Therefore, we advise traders to maintain long positions, in line with our initial recommendation to have long positions above the 27,436-pt level on 12 Jun. A trailing-stop is advisable to set below the 27,989-pt threshold in order to secure part of the gains.

Source: RHB Securities Research - 4 Jul 2019