Maintain long positions. The HSIF continued rising amid bullish sentiment, adding 67 pts to settle at 27,631 pts. The index gapped down 87 points yesterday to open lower at 27,674 pts. Despite a negative opening, it managed to find footing at the day low of 27,402 pts. It then climbed to test the day high at 27,774 pts before last trading at 27,631 pts. During the evening session, bullish sentiment continued to be seen. The HSIF opened at 27,624 pts and ended higher at 27,813 pts. Underpinned by the strong bullish momentum, the index closed higher for a third consecutive session since 4 Jan. With the recent price action showing a series of higher highs, together with elevated lows, this indicates buying pressure is stronger than selling pressure. Coupled with the RSI still pointing upwards – suggesting an immediate term of positive momentum – we maintain our positive trading bias.

We recommend traders maintain long positions. We initiated these at 26,943 pts, or the closing level of 30 Dec 2020. For risk-management purposes, we adjust the stop loss higher to 27,108 pts.

The immediate support remains at 5 Jan’s low – 27,108 pts – and is followed by 26,729 pts. On the upside, the immediate resistance is pegged at 27,984 pts and followed by the next hurdle at 28,193 pts.

Source: RHB Securities Research - 7 Jan 2021