Maintain long positions. The HSIF had strong momentum on Thursday. Once the index broke past the two-month resistance level of 25,202 pts, it surged 614 pts to reach the day session high of 25,816 pts to settle at 25,810 pts. During the night session, the index continued to trend higher, and touched a session high of 26,024 pts. Upon touching the session high, profit-taking activity was seen, resulting in the index retracing lower to 25,883 pts. With the recent price action, we reckon that the index has turned to a risk-on sentiment. Underpinning strong momentum, we do not rule out the possibility of some pull back or profit-taking activities in coming sessions. As long the support levels are intact, we will keep our positive trading bias.

We recommend traders maintain long positions. We initiated these at 25,029 pts, which was the closing level on 3 Nov. For risk-management purposes, and for profit protection, a trailing stop is set below 25,500 pts.

The immediate support is marked at 25,202 pts, followed by 24,591 pts, which was the high of 30 Oct. On the upside, immediate resistance is eyed at the recent high of 26,024 pts, followed by the high of 26,250

Source: RHB Securities Research - 6 Nov 2020