Maintain long positions. The HSIF saw a risk-on mood yesterday, crossing the 26,500-pt psychological mark to settle at 26,617 pts. It began the day session on a positive note, rising 88 pts from the previous evening session to open at 26,540 pts. The index retraced lower and found its footing at a day low of 26,412 pts. Thereafter, riding on the bullish sentiment, the index rose higher and closed at 26,617 pts. The bullish sentiment continued to spill over to the evening session, which saw the index last traded at 26,680 pts. Combining the price actions in the last two sessions, we think that the index has managed to cross the 26,500-pt mark firmly and is ready to challenge the high of 26,791 pts. We also expect the trading range to expand to at least 200 pts. These positive expectations will remain as long the support level stays intact. Premised on this, 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 trailing stop can be placed below 26,226 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 7 Jul’s high of 26,791 pts, followed by the round figure of 27,000 pts.

Source: RHB Securities Research - 25 Nov 2020