Uptrend likely to continue; stay long. The upward movement of the HSIF has continued as expected, as another white candle was formed yesterday. It closed at 27,827 pts, after oscillating between a high of 27,949 pts and low of 27,541 pts. Market sentiment remains bullish, as the aforementioned white candle was the sixth one in six consecutive sessions. Furthermore, as the 21-day SMA line is likely to turn higher, it would appear that the bullish sentiment has been enhanced. Overall, we believe the bullish outlook stays intact.

Based on the daily chart, we are eyeing the immediate support level at 27,126 pts, ie the low of 4 Nov’s long white candle. If a breakdown arises, look to 26,457 pts – which was the low of 23 Oct – as the next support. Towards the upside, the immediate resistance level is maintained at the 28,000-pt psychological mark. Meanwhile, the next resistance will likely be at 28,841 pts, determined from the high of 19 Jul.

Hence, we advise traders to stay long, following our recommendation to have long positions above the 26,150-pt level on 16 Oct. In the meantime, a trailing stop can be set below the 27,126-pt threshold in order to lock in part of the profits.

Source: RHB Securities Research - 8 Nov 2019