Maintain long positions. The HSIF saw another bullish session last Friday, rising 258 pts to settle at 27,801 pts. Following Thursday’s Shooting Star pattern, the index opened lower at 27,609 pts and dipped to a day low at 27,551 pts. Buying interest emerged near this low, which then saw the HSIF climbing to the 27,967-pt day high – it last traded at 27,801 pts. Further buying pressure was seen during the evening session – the index closed higher at 27,846 pts after testing the 27,996-pt session high. Based on the latest price action, the Shooting Star formation was negated by a white candle, indicating the bulls are still griping the HSIF higher. Although it is trading far apart from the 20- and 50-day SMA lines, we think, for the immediate term, the index still tends to rise higher, as supported by the uptrending RSI. Buying pressure is still stronger than selling pressure. Hence, 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 and profit pretection, the trailing loss is set at 27,300 pts.

The immediate support is marked at 6 Jan’s low at 27,402 pts and followed by 5 Jan’s low of 27,108 pts. On the upside, the immediate resistance is pegged at 27,984 pts, with the next hurdle at 28,193 pts.

Source: RHB Securities Research - 11 Jan 2021