Maintain long positions. The HSIF continued moving higher for the fifth consecutive session, adding 278 pts to settle at 29,892 pts, just 108 pts from the physcological level of 30,000 pts. Following the strong momentum on Wednesday, the index opened flat at 29,545 pts yesterday. It briefly dipped to the 29,531-pt day low, before climbing to the 29,977-pt day high and settling at 29,892 pts. The evening session saw the HSIF maintaining its bullish momentum, closing at 29,961 pts – a level near the session’s high of 29,970 pts. Based on the last 10 sessions’ price actions, the average trading range (ATR) further widened to 256 pts. A projection of 2x ATR from the latest settlement of 29,892 pts with the nearest support level of 29,378 pts. Since volatility increased, we raise the stop loss level to trail the uptrend movement. With the bullish momentum intact, we maintain a 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 set at 29,378 pts.

The immediate support is revised to 29,378 pts, followed by the round figure of 29,000 pts. Towards the upside, the immediate resistance is pegged at the physcological level of 30,000 pts, with the next resistance at 30,086 pts.

Source: RHB Securities Research - 21 Jan 2021