The bullish outlook stays unchanged; maintain long positions. The upside strength of the HSIF continued as expected, as a white candle was formed last Friday. It rose to a high of 28,726 pts during the intraday session, before ending at 28,666 pts for the day. As the index posted its second consecutive white candle, this can be viewed as the bulls extending their upward momentum. Overall, we expect the market to rise further if the immediate 28,947-pt resistance is taken out decisively in the coming sessions.

According to the daily chart, the immediate support level is seen at 27,865 pts – this was determined from 8 Jan’s low. Meanwhile, the next support is maintained at 27,380 pts, which is situated near the midpoint of 13 Dec 2019’s long white candle. On the other hand, we are eyeing the immediate resistance level at 28,947 pts, ie the high of 3 Jan. The next resistance is anticipated at 29,080 pts, or the previous high of 4 Jul 2019.

Hence, we advise traders to stay long, in line with our initial recommendation to have long positions above the 26,500-pt level on 12 Dec 2019. A trailing-stop can be set below the 27,865-pt threshold to lock in part of the profits.

Source: RHB Securities Research - 13 Jan 2020