Maintain long positions. The HSIF formed a “Doji” candle last Friday. It slipped 73 pts to close at 23,196 pts. Based on the current outlook, we maintain our positive view, as the index has remained below the 22,560-pt support mentioned previously. Technically speaking, as long as the bullishness of 2 Apr’s “Hammer” pattern is not nullified, this shows that the upside swing is still in effect. As such, we believe that the bulls still have control over the market.

As seen in the chart, we anticipate the immediate support level at 22,560 pts, set near the low of 2 Apr’s “Hammer” pattern. If a breakdown arises, the next support is maintained at the 22,000-pt psychological spot. Towards the upside, the immediate resistance level is seen at 24,050 pts, ie the high of 27 Mar. Meanwhile, the next resistance is situated at 24,750 pts, which is near 16 Mar’s high.

Hence, we advise traders to maintain long positions, in line with our initial recommendation to have long positions above the 22,300-pt level on 25 Mar. A trailing-stop can be set below the 22,560-pt mark in order to minimise the downside risk.

Source: RHB Securities Research - 6 Apr 2020