Maintain long positions. The HSIF moved higher on strong buying interest, rising 245 pts to settle at 28,836 pts. On Monday, it gapped 63 pts lower to open at 28,430 pts. After briefly testing the 28,378-pt day low, it saw strong buying pressure, lifting it towards the 28,843-pt day high, to close at 28,836 pts. In the evening session, the bulls continued marching higher. The index opened at 28,842 pts and swung to the session high of 28,966 pts. It was last traded at 28,934 pts. Based on the latest price actions, the bulls’ buying strength is much stronger than the bears’ selling strength. The last 10 sessions’ average trading range (ATR) was recorded at 185 pts. An estimation of 2x ATR from the latest settlement of 28,836 pts will see the upside resistance marked at 29,207 pts, and downside support at 28,465 pts. Riding on the strong 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 and profit protection, the trailing-stop is set at 28,650 pts.

The immediate support is marked at the 29,000-pt round figure, followed by 28,465 pts. On the upside, the immediate resistance is pegged at 29,207 pts, with the next hurdle at 29,391 pts.

Source: RHB Securities Research - 19 Jan 2021