Maintain long positions. The HSIF saw mild profit-taking yesterday, retreating 30 pts to settle at 28,236 pts. The index opened lower at 28,233 pts, rising to a day high at 28,408 pts before retracing to the 28,172-pt day low – it closed at 28,236 pts. The evening session saw the bulls paring the earlier losses, lifting the HSIF to close at 28,302 pts after testing the session low at 28,168 pts. As the index trends higher, we do expect the bears to profit take. Hence, the selling pressure was well absorbed by the bulls. The RSI is trending higher, suggesting the immediateterm momentum continues to be bullish – it is very likely that the HSIF will test the upside resistance at 28,466 pts. Since the bullish structure is intact, 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 of 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 - 14 Jan 2021