Stay long, with a trailing-stop set below the 23,418-pt support. The HSIF formed a negative candle yesterday. It closed at 24,502 pts, off its high of 24,777 pts and low of 24,441 pts. However, we maintain our positive sentiment, as the HSIF is still trading above the recent low of the 23,418-pt support mentioned previously. That said, as long as the bullishness of the “Hammer” pattern created on 22 Apr is not negated, this should show that the rebound is not diminished yet. Overall, we remain bullish on the HSIF’s outlook.

As seen in the chart, the immediate support level is seen at the 24,000-pt round figure. The crucial support is anticipated at 23,418 pts, ie the low of 22 Apr’s “Hammer” pattern. On the other hand, we are now eyeing the immediate resistance level at the 25,000-pt psychological mark. If a decisive breakout arises, look to 25,750 pts – situated near the high of 11 Mar – as the next resistance.

Therefore, we advise traders to maintain long positions, given that we previously recommended initiating long above the 22,300-pt level on 25 Mar. In the meantime, a trailing-stop can be set below the 23,418-pt threshold to secure part of the profits.

Source: RHB Securities Research - 30 Apr 2020