Maintain long positions. The HSIF saw a neutral session yesterday, moving sideways just below the 26,500-pt psychological mark. The index began the day session with a 156-pt gap down from the previous evening session – opening at 26,395 pts. The bulls tried to claw back higher but only managed to record a day high at 26,450 pts before the bears sent the index to the day low of 26,313 pts. After reaching the low, the index bounced up and settled at 26,349 pts. The evening session saw the index moving in the same trading range, closing at 26,407 pts. With the RSI indicator rounding the top, the index momentum is wavering and may retest the low of 26,000 pts. Looking at the big picture, the 20-day SMA line is moving higher – we think that the index will meet the moving average line somewhere near the 26,000-pt level. As long as the immediate support level is intact, we will stick to a 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, a stop-loss can be set below 25,920 pts.

The immediate support is unchanged at 25,920 pts and followed by 25,816 pts. On the upside, the immediate resistance is pegged at the recent 26,644-pt high and followed by 7 Jul’s high of 26,791 pts.

Source: RHB Securities Research - 20 Nov 2020