Maintain long positions. The HSIF saw volatility increasing last Friday, bouncing off from the support level to close higher. The index began at 26,146 pts – trading between the 26,197-pt high and 25,920 pts – before closing at 26,177 pts. Sentiment turned positive over the night session – we saw bulls buying dips at 26,123 pts before the HSIF rose higher to close at 26,288 pts. The latest session saw the bears trying to break below the support level, but failing. The bulls provided a strong buying interest near the 26,000-pt physcological level. With the RSI indicator still slanting upwards, we think the uptrend will remain intact. As such, we stick to a positive trading bias.

We recommend traders maintain long positions. Our previous long positions – initiated at 25,029 pts, or 3 Nov’s closing level – were closed out at 26,100 pts during the latest session due to the triggered trailing-stop. Concurrently, we re-initiate long positions, as the HSIF’s closing level is above the support threshold. For risk-management purposes, we set a stop-loss below the 25,920 pts level.

The immediate support is revised to 25,920 pts and followed by 25,816 pts. On the upside, the immediate resistance is pegged at 26,492 pts – the high of 12 Nov – and followed by the 7 Jul high of 26,791 pts

Source: RHB Securities Research - 16 Nov 2020