Maintain long positions. The HSIF continued its positive momentum, touching the 27,000-pt psychological mark before settling at 26,645 pts. It began the day session with a huge gap up, rising 105 pts from the previous evening session to open at 26,780 pts. The index surged to the session high of 27,077 pts, before the bulls started taking profit. The index then fell to the session low of 26,593 pts before closing at 26,645 pts. The evening session was rather neutral, with the index moving within a tight range of 26,696 - 26,557 pts before closing at 26,687 pts. With the RSI indicator still pointing north, we think the index will gradually move above 26,500 pts to form an interim base. The 20-day SMA line is also catching up with the index, providing additional support to the trend. Premised on the higher highs and higher lows pattern, we keep our 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.

Immediate support is maintained at the recent low of 26,226 pts, followed by 25,920 pts. On the upside, the immediate resistance is kept at 7 Jul’s high of 26,791 pts, followed by the 27,000-pt round figure.

Source: RHB Securities Research - 26 Nov 2020