Bearish mode remains intact. Today, we analyse the HSIF’s trend based on its weekly chart. Last week, it posted a white candle, indicating that the recent selling momentum may be slowing down. However, we do not anticipate the market trend turning positive now, given that the index is hovering below the 3-month downtrend line drawn in the weekly chart. In addition, the HSIF remains below the declining 30-week SMA line, which means the negative sentiment has been enhanced. Technically speaking, the sentiment is likely to remain negative, as long as the prices are still holding below the aforementioned downtrend line.

Based on the weekly chart, we anticipate the immediate resistance level at the 25,000-pt round figure, which is also set near the aforementioned downtrend line. The next resistance is seen at the 27,000-pt psychological spot. To the downside, the support level is situated at 23,400 pts, ie near 20 Apr’s low. This is followed by 22,100 pts, or near the low of 9 Mar’s long black candle.

Still, based on our analysis of the daily chart, we advise traders to stay long. This is because the market is holding above the 23,418-pt support mentioned in our daily chart. Please refer to our 30 Apr report for more details.

Source: RHB Securities Research - 4 May 2020