Maintain long positions. The HSIF saw the resumption of its uptrend, jumping 615 pts to settle at 30,076 pts. Following a bearish candle last Friday, the index gapped 68 pts higher to open at 29,580 pts. After touching the day low of 29,575 pts, strong buying interest lifted it towards the 30,158-pt day high, and was last traded at 30,081 pts. In the evening session, the index moved in a narrow range of between 30,098 pts and 29,793 pts, before closing at 29,902 pts. The latest session has negated the Shooting Star reversal signal. Based on the last 10 sessions, the average trading range (ATR) has widened to 306 pts. By projecting 1x ATR from 30,076 pts, we estimate the next resistance will be at 30,382 pts. As a fresh higher high was recorded, we think the bullish momentum will push the index towards the resistance levels of 30,143 pts and 30,382 pts. Hence, we maintain our positive trading bias.

We recommend that traders stick to 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 raised to 29,450 pts.

The immediate support is revised to the 29,500-pt round figure, followed by 29,158 pts. Towards the upside, the immediate resistance is pegged at 21 Jan’s high of 30,143 pts, followed by the next hurdle at 30,382 pts.

Source: RHB Securities Research - 26 Jan 2021