Maintain long positions. The HSIF inched higher during the first trading session of the week, rising 184 pts to settle at 27,985 pts – 15 pts shy of the 28,000-pt round figure. The index gapped 117 pts higher yesterday to open at 27,963 pts. It found footing at the day low of 27,785 pts and climbed to the 28,162-pt day high before last trading at 27,985 pts. During the evening session, the HSIF saw sideways consolidation. It last traded at 27,835 pts after testing the session low at 27,757 pts. From the price actions, we see no signs of a negative reversal yet. Although we reckon the index is trading far apart from the 20- and 50-day SMA lines, the selling pressure was well met by buying pressure. The RSI indicator is rounding the uptrend line, indicating that the momentum is slowing down slightly. As long as the HSIF trades above the trailing stop, we maintain our positive trading bias.

We recommend traders stick to long positions. We initiated these at 26,943 pts, or the closing level of 30 Dec 2020. For risk-management purposes and profit protection, the trailing stop is adjusted to 27,410 pts.

The immediate support is marked at 8 Jan’s low at 27,410 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 - 12 Jan 2021