Stay long, with a trailing-stop set below the 23,418-pt support. The HSIF’s upside move continued as expected, after it ended higher to form a positive candle. It rose 122 pts to close at 23,991 pts. Market sentiment remains positive, as the index has posted a second consecutive positive candle and marked a higher close above the recent low of the 23,418-pt support. We view yesterday’s positive candle as a continuation of the bullish reversal of 22 Apr’s “Hammer” pattern. Overall, we keep our positive view on the HSIF’s outlook.

According to the daily chart, the immediate support level is seen at 23,418 pts, ie the low of 22 Apr’s “Hammer”. If a breakdown arises, the next support is maintained at the 23,000-pt psychological spot. Towards the upside, we are eyeing the immediate resistance level at 24,700 pts, which was determined near the high of 17 Apr. Meanwhile, the next resistance should likely be at 25,750 pts, ie near the high of 11 Mar.

Therefore, we advise traders to stay long, following our recommendation of initiating long above the 22,300-pt level on 25 Mar. A trailing-stop can be set below the 23,418-pt threshold to lock in part of the profits.

Source: RHB Securities Research - 24 Apr 2020