Stay long, with a stop-loss set below the 24,791-pt support. The HSIF formed a positive candle yesterday. It settled at 26,650 pts, off its high of 26,795 pts and low of 26,506 pts. Based on the current technical landscape, the market sentiment remains positive, as the index has continued to stay above the 21-day SMA line. Given that the 14-day RSI indicator has climbed above the 50 neutral point to flash a bullish reading at 57.14 pts, there is a possibility the upside move should persist. Overall, we remain bullish on the HSIF’s outlook.

As seen in the chart, we are eyeing the immediate support level at the 26,000-pt psychological mark, situated near the midpoint of 4 Sep’s long white candle as well. The next support would likely be at 24,791 pts, ie the low of 15 Aug’s “Hammer” pattern. On the other hand, the immediate resistance is seen at 26,880 pts, obtained from the high of 5 Aug. The next resistance is maintained at the 28,000-pt round figure.

Hence, we advise traders to maintain long positions, following our recommendation of initiating long above the 26,000-pt level on 21 Aug. In the meantime, a stop-loss can be set below the 24,791-pt mark in order to minimise the downside risk.

Source: RHB Securities Research - 10 Sept 2019