Stay long while setting a trailing-stop below the 22,800-pt support. The HSIF ended higher to form a positive candle last Friday. It rose to a high of 24,048 pts during the intraday session, before ending at 23,503 pts for the day. Technically speaking, we think the positive sentiment stays unchanged, as the index marked a higher close above the 10-day SMA line. As long as the HSIF fails to erase the gains that had been created by 25 Mar’s white candle, we believe the buyers still have control of the market. Overall, we remain positive on our HSIF outlook.

According to the daily chart, we maintain the immediate support level at 22,800 pts, ie near the low of 25 Mar. The next support is seen at 22,300 pts, situated near the midpoint of 24 Mar’s white candle. On the other hand, we are eyeing the immediate resistance level at the 24,000-pt psychological spot. If a decisive breakout arises, the next resistance is anticipated at the 25,000-pt round figure.

Hence, we advise traders to stay long, following our recommendation of initiating long above the 22,300-pt level on 25 Mar. A trailing-stop set below the 22,800-pt level is advisable in order to limit the risk per trade.

Source: RHB Securities Research - 30 Mar 2020