Maintain long positions. The HSIF bulls are taking a pause after retracing 228 pts to settle at 24717 pts – this snapped a sixth straight winning streak. The index started the day session lower at 24,744 pts, briefly trading at the session high of 24,836 pts before dipping to a session low at 24,567 pts. During the night session, the HSIF pared some losses, recovering 99 pts to close at 24816 pts, ie near to the session high. The index started lower at 24,706 pts, dipping to a 24,679-pt low before rebounding to a session high of 24,837 pts. Although there was a retracement from the recent high, the 20-day SMA line is still curving higher – we believe this, together with the 50-day SMA line, acts as a technical support for the bullish trend. The momentum indicator RSI is trending higher too, and we do expect the HSIF to regain the uptrend trajectory after the correction is done. We maintain our positive trading bias.

We recommend traders stick to long positions. We initiated these at 23,951 pts, or the closing level of 6 Oct. For riskmanagement purposes, the stop-loss is set at 24,466 pts, ie 21 Oct’s day low.

The immediate support is unchanged at 24,466 pts and followed by the 23,981-pt mark. On the upside, the immediate resistance is sighted at the 25,000-pt round number and followed by the 25,202-pt level.

Source: RHB Securities Research - 28 Oct 2020