Initiate long positions, as the bulls have regained control. The HSIF continued to extend its rebound after recently re-testing the 50-day SMA line. The index settled at 25,295 pts at the close – above the previous 25,183- pt resistance. With the HSIF’s strong price actions off the aforementioned SMA line, our prior negative trading bias has been invalidated. This implies the likelihood of the index resuming its rebound phase. Hence, we switch our trading bias to positive from our previous negative view.

Our prior short positions were initiated at 24,212 pts, which was the closing level of 12 Jun – this was closed out at 25,183 pts during the latest session. Concurrently, we initiate long positions at the latest close. For riskmanagement purposes, a stop-loss can be placed at below the 24,700-pt threshold.

We revise the immediate support to 25,000 pts – a round figure. This is followed by 24,700 pts, or the price point of 2 Jul. Conversely, the immediate resistance is now eyed at 25,743 – 11 Mar’s high – and followed by the 26,000- pt round figure.

Source: RHB Securities Research - 6 Jul 2020