Stay long, with a new trailing-stop set below the 28,052-pt level. The HSIF formed a black candle yesterday. It lost 448 pts to settle at 28,373 pts. Yet, the bullish sentiment stays unchanged as this candle can only be viewed as buyers probably taking a breather after recent gains. From a technical perspective, as the bullishness of 15 Jul’s “Hammer” pattern has not been negated, this shows that the selling momentum is considered weak. Overall, we remain bullish on the HSIF’s outlook.

As seen in the chart, we are now eyeing the immediate support at 28,052 pts, determined from the low of 15 Jul’s “Hammer” pattern. The next support is maintained at 26,702 pts, ie the previous low of 13 Jun. Towards the upside, the immediate resistance is anticipated at 29,080 pts, ie 4 Jul’s high. Meanwhile, the next resistance would likely be at the 30,000-pt psychological spot, set near the high of 6 May’s long black candle as well.

Therefore, we advise traders to stay long, following our recommendation to initiate long above the 27,436-pt level on 12 Jun. In the meantime, a new trailing-stop can be set below the 28,052-pt threshold in order to lock in a larger part of the profits.

Source: RHB Securities Research - 23 Jul 2019