Maintain long positions. The HSIF took a breather after the recent rally, with the index starting the day session at 26,268 pts – bouncing between the 26,444-pt high and 26,176 pts – before settling at 26,256 pts. Sentient improved during late session, with the HSIF starting the night session at 26,274 pts – the bears tried to breach this level twice, but failed. Towards the close, the bulls stepped in and moved the index in the direction of the 26,441-pt high. Last trade was at 26,404 pts. With both the 20- and 50-day moving averages inclining upwards, the major trend remains bullish. However, since the HSIF is trading far apart from the 20-day SMA line, more consolidation – or a minor pullback – is needed. As long as the support levels stay intact, we will keep to a positive trading bias.

We recommend traders maintain long positions. We initiated these at 25,029 pts, which was 3 Nov’s closing level. For risk-management purposes and profit protection, the trailing-stop is raised to 26,100 pts.

The immediate support remains unchanged at 26,024 pts – this was 6 Nov’s high. It is followed by 25,576 pts, which was 9 Nov’s low. On the upside, the immediate resistance is pegged at 26,791 pts, ie the high of 7 Jul, and followed by the recent high of 26,875 pts.

Source: RHB Securities Research - 12 Nov 2020