Maintain long positions. The HSIF is taking a pause after failing to close above the 26,500-pt psychological mark. The index began the day session with a 99-pt gap up from the previous evening session, opening at 26,542 pts. Despite breaching the 26,500-pt mark, the index saw selling pressure, and fell to a low of 26,332 pts before settling at 26,419 pts. In the evening session, the bears tried again to pull the index down. However, the effort proved futile, as the bulls absorbed the selling pressure near the session low of 26,288 pts, and pushed the index upwards to close at 26,453 pts. Based on the price action, we see that the bulls are still dominating the trend. However there will be selling pressure near the 26,500-pt mark. We also expect to see a minor pullback or retracement to form a base near 26,200 pts. As long as the immediate support level stays intact, we will keep our positive trading bias.

We recommend traders maintain long positions. We initiated these at 26,177 pts, or the closing level of 13 Nov. For risk-management purposes, we set a stop-loss below 25,920 pts.

The immediate support will remain at 25,920 pts, followed by 25,816 pts. On the upside, the immediate resistance is seen at the 26,500-pt round figure, followed by 7 Jul’s high of 26,791 pts.

Source: RHB Securities Research - 18 Nov 2020