Maintain long positions. The HSIF October contract came to its last trading day on Thursday, falling 100 pts to settle at 24,501 pts. During the day session, the index gapped down 200 points to start at 24,400 pts, drifting lower towards the session’s low of 24,256 pts before rebounding to the session high of 24,527 pts. During the night session, the index spot month rolled over to the November contract. It started at 24,512 pts, dipping to a low of 24,365 before rebounding to the session high of 24,591. The index has seen retracements during the last three sessions, and is now sitting on the support of the 20-day SMA line. The upcoming trading sessions are crucial, as both moving averages – the 20-day and 50-day SMA lines – are converging near the 24,466-pt support level. The index needs to trade above the moving averages to maintain its bullish momentum. As the support level is intact, we maintain our positive trading bias.

We recommend that traders maintain long positions, initiated at 23,951 pts – the closing level of 6 Oct. For riskmanagement purposes, the stop-loss is set at 24,466 pts, or 21 Oct’s day low. The immediate support is kept at 24,466 pts, followed by the 23,981-pt mark. On the upside, immediate resistance is eyed at 24,717 pts, followed by 24,960 pts

Source: RHB Securities Research - 30 Oct 2020