Maintain long positions. The HSIF has jumped above the 28,000-pt physcological mark, rising 281 pts to settle at 28,266 pts. The index opened flat yesterday at 27,826 pts. After briefly trading at the 27,804-pt day low, buying interest lifted the HSIF towards the day high at 28,287 pts – it closed at 28,266 pts. The evening session saw it hovering near the session’s high and low of 28,327 pts and 28,201 pts before last trading at 28,201 pts. We see the uptrend as well supported by strong buying interest. Worth to note: The average trading range (ATR) for the last 10 sessions increased to 200 pts. If we extend 1x ATR from the latest settlement price – 28,266 pts – we will see the next resistance pegged at 28,466 pts. As long as the index continues to trend above the trailing stop, 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 protection, the trailing stop is adjusted to 27,757 pts.

The immediate support is marked at 12 Jan’s low at 27,757 pts, and followed by 6 Jan’s closing of 27,631 pts. On the upside, the immediate resistance is pegged at 28,466 pts, with the next hurdle at the 28,500-pt round figure.

Source: RHB Securities Research - 13 Jan 2021