Maintain long positions. The HSIF saw another sideways session on Monday, jumping above the 26,500-pt psychological mark but ending lower. It began the day session with a bang, rising 85 pts from the previous evening session to open at 26,630 pts and reaching the high of 26,709 pts. Despite the strong opening, the bulls wavered and saw the index falling to the low of 26,375 pts before it settled at 26,496 pts. Over at the evening session, the index briefly touched the high of 26,529 pts and closed lower at 26,452 pts. The HSIF is still capped by the psychological level of 26,500 pts, although the 20-day SMA line is catching up. The average trading range, or ATR, of the last 10 sessions fell to 81 pts from 214 pts. With the RSI flattening, we do expect a narrow trading range to be continued until the immediate support level or resistance level is breached. Until then, we maintain a positive trading bias.

We recommend traders keep long positions. We initiated these at 26,177 pts, or the closing level of 13 Nov. For riskmanagement purposes, a stop-loss can be placed below 26,100 pts.

The immediate support will be the recent low of 26,226 pts, followed by 25,920 pts. On the upside, the immediate resistance is marked at the recent 26,644-pt high, followed by 7 Jul’s high of 26,791 pts.

Source: RHB Securities Research - 24 Nov 2020