Stay long. At the time of writing, the HSIF is forming a “Doji” candle. It rose 22 pts to close at 24,231 pts. Still, the bullish sentiment stays unchanged as this candle can only be viewed as buyers probably taking a pause after the recent gains. Since the index is still holding above the rising 10-day SMA line, this indicates that the upside move is not diminished thus far. Overall, we believe the upside swing that started off 2 Apr’s “Hammer” pattern would likely persist in the coming sessions.

Based on the daily chart, the immediate support level is anticipated at 23,500 pts, ie near the midpoint of 6 Apr’s white candle. The crucial support is maintained at 22,560 pts, which was near the low of 2 Apr’s “Hammer” pattern. Towards the upside, we are eyeing the immediate resistance level at 24,600 pts, defined near the high of 8 Apr. Meanwhile, the next resistance is seen at 25,750 pts, ie near the high of 11 Mar.

Hence, we advise traders to stay long, following our recommendation of initiating long above the 22,300-pt level on 25 Mar. In the meantime, a trailing-stop set below the 23,500-pt mark is advisable to lock in part of the gains.

Source: RHB Securities Research - 14 Apr 2020