Maintain long positions. The HSIF had a volatile session on Wednesday, breaking past the resistance level to reach a two-month high. The index struggled during the day session, starting at 24,807 and moving up to a high of 25,064 pts before seeing some selling pressure and plunging 439 pts to a low of 24,625 pts. Later in the session, it pared its earlier losses and managed to settle at 24,942 pts. During the night session, the index saw huge buying interest, and surged to a high of 25,590 pts. It closed at 25,479 pts, an increase of 537 pts from the day session. With the 20-day SMA line pointing upwards, coupled with the RSI trending above the 50% level, we believe the bullish momentum will stay intact. As the downside support has not been breached, we keep our positive trading bias.

We recommend traders switch to long positions. We initiated these at 25,029 pts, which was the closing level of 3 Nov. For risk-management purposes, a stop-loss is set below 24,900 pts.

The immediate support is marked at 24,967 pts, followed by the 24,591 pts, which was the low of 3 Nov. On the upside, immediate resistance is eyed at the recent high of 25,590 pts, followed by 31 Aug’s high of 25,790 pts.

Source: RHB Securities Research - 10 Nov 2020