In long positions to tag the rebound. The HSIF’s rebound continued to extend in the latest trade, adding 122 pts to close at 24,867 pts. While price actions in the latest two sessions suggest the index is facing some difficulties in settling above the 25,000-pt mark, we are seeing this as just a possible minor pause after it recently crossed above the 24,600-pt resistance-turned-support. Additionally, the index is also trading relatively well above the 50-day SMA line.

Our previous short positions initiated at 23,355 pts on 26 May were closed out at the 24,000-pt mark on 3 Jun. Concurrently, we initiated long positions at 24,243 pts, the closing level on the same day. For risk management purposes, a stop-loss can now be placed at the breakeven mark.

The immediate support is revised to 24,600 pts. This is followed by the 24,100-pt mark, near the lows of 4 and 5 Jun. Meanwhile, the immediate resistance is now set at the 25,000-pt round figure, followed by 25,500 pts.

Source: RHB Securities Research - 10 Jun 2020