Upside move is likely to persist; stay long. The HSIF ended higher yesterday to form a white candle, increasing 544 pts to close at 23,740 pts – this was off the session’s low of 22,970 pts. On a technical basis, the upside move is likely to continue, after the index marked a higher close above the 10-day SMA line. This may also further extend the rebound that began with 2 Apr’s “Hammer” pattern. Overall, we expect the market to rise further if the immediate 24,050-pt resistance mentioned previously is taken out decisively in the coming sessions.

According to the daily chart, the immediate support level is now seen at the 23,000-pt psychological spot. Meanwhile, the crucial support is anticipated at 22,560 pts, ie near the low of 2 Apr’s “Hammer” pattern. On the other hand, we are eyeing the immediate resistance level at 24,050 pts, which was near the high of 27 Mar. If a breakout occurs, look to 24,750 pts – obtained near the high of 16 Mar – as the next resistance.

Therefore, we advise traders to stay long, given that we previously recommended initiating long above the 22,300- pt level on 25 Mar. A trailing-stop can be set below the 22,560-pt mark to limit the downside risk.

Source: RHB Securities Research - 7 Apr 2020