Maintain long positions. The HSIF has pumped higher and closed above the 24,600-pt resistance level. The index started the day’s session at 24,178 pts and tested the 24,155-pt session low, before powering up to a session high of 24,713 pts. During the evening session, the HSIF retraced slightly, opening at 24,659 pts before rebounding higher to 24,743 pts – last trade was at 24,706 pts. Throughout both sessions, we saw a day range of 588 pts between the session’s high and low. A wide-trading range, coupled with a positive close, indicate that a strong bullish momentum is undergoing. As long as the downside support level continues to hold during the coming sessions, we believe the uptrend will remain intact together with a wide trading range. Hence, we maintain our positive trading bias.

We recommend traders stay in long positions. We initiated these positions at 23,951 pts, or the closing level of 6 Oct. For risk-management purposes, we raise the stop-loss level higher to 23,880 pts, which was the day’s low on 7 Oct.

The immediate support level is marked at 23,880 pts and followed by the 23,600-pt mark. On the upside, the immediate resistance will be the day high of 16 Sep – 24,898 pts – and followed by 25,000 pts, ie the round figure.

Source: RHB Securities Research - 13 Oct 2020