Maintain long positions. The HSIF ended its six consecutive gains, declining 454 pts to settle at 29,461 pts. Following the appearance of a Shooting Star at the top, it gapped 41 pts lower to 29,822 pts. After briefly trading at the day high of 29,888 pts, seling pressure dragged it towards the 29,415-pt day low, to close at 29,461 pts. In the evening session, it closed at 29,512 pts, after testing the 29,323-pt day low. It will be a healthy pullback to see the HSIF test the 29,378-pt immediate support level, after the parabolic move since 31 Dec 2020. However, a breakdown below the immediate support level will trigger a larger wave of corrections – at worst case, towards the 20-day SMA line. A jump above the 30,000-pt psychological level will rally the bulls and resume the upwards movement. As long as the immediate support or trailing-stop is intact, we will maintain our positive trading bias.

We recommend that traders maintain long positions, initiated at 26,943 pts, or the closing level of 30 Dec 2020. For risk management and profit protection, the trailing-stop is kept at 29,378 pts.

The immediate support is marked at 29,378 pts, followed by the 29,000-pt round figure. Towards the upside, the immediate resistance is pegged at the 30,000-pt psychological level, followed by 21 Jan’s high of 30,143 pts.

Source: RHB Securities Research - 25 Jan 2021