Market hits 3-week high; stay long. The HSIF’s upside move continued as expected, as a second consecutive white candle was formed yesterday. This indicated a persistent buying momentum. It surged 683 pts to close at 24,423 pts. In view of yesterday’s close, the HSIF has taken out the previously indicated 24,050-pt resistance and hit its 3-week high, implying that the positive sentiment remains intact. Technically, yesterday’s white candle can be viewed as a continuation of the bulls extending the upside swing from 2 Apr’s “Hammer” pattern.
As seen in the chart, we are now eyeing the immediate support level at the 24,000-pt round figure. If a breakdown arises, look to 23,500 pts – set near the midpoint of 6 Apr’s white candle – as the next support. To the upside, the immediate resistance level is seen at 24,750 pts, ie near the high of 16 Mar. Meanwhile, the next resistance is anticipated at 25,750 pts, which is defined near the high of 11 Mar.
Recall that we initially recommended traders to initiate long positions above the 22,300-pt level on 25 Mar. We continue to advise them to stay long for now while setting a trailing-stop below the 23,500-pt mark – so as to secure part of the profits.
Source: RHB Securities Research - 8 Apr 2020