Maintain long positions, with a trailing-stop set below the 27,989-pt support. The HSIF formed a “Doji” candle with a long lower shadow yesterday. During the intraday session, it dropped to a low of 28,052 pts before ending at 28,523 pts for the day. However, it is not surprising that buyers may be taking a pause following the recent gains. On a technical basis, yesterday’s long lower shadow implied that there was initial selling pressure during the day before the market moved up by the end of the trading session. This indicated that the market outlook was still bullish.

Presently, the immediate support level is seen at 27,989 pts, ie the low of 26 Jun. If this level is taken out, look to 26,702 pts – obtained from the low of 13 Jun’s “Hammer” pattern – as the next support. On the other hand, we maintain the immediate resistance level at 29,080 pts, which was the high of 4 Jul. Meanwhile, the next resistance is anticipated at the 30,000-pt round figure, also situated near the high of 6 May’s long black candle.

Thus, we advise traders to stay long, given that we initially recommended initiating long above the 27,436-pt level on 12 Jun. A trailing-stop can be set below the 27,989-pt mark in order to lock in part of the profits.

Source: RHB Securities Research - 16 Jul 2019