Maintain long positions. The HSIF entered its second day of consolidations, retracing 122 pts to settle at 29,090 pts. Yesterday, it gapped 115 pts lower to open at 29,234 pts. Intraday trade saw the index fall to the 28,689-pt day’s low, before rebounding, and was last traded at 29,051 pts. The 20-day SMA line is moving higher and providing strong support to the index. As it managed to stay above the 20-day SMA line, we deem the uptrend intact, and consolidations may continue in the immediate term until the resistance is breached. We do also expect some mild corrections, as long as the stop-loss stays intact. Premised on these, we keep a positive trading bias.

We recommend traders maintain long positions. These were initiated at 29,230 pts, or the closing level of 2 Feb. To manage risks, the stop-loss is placed at 28,434 pts.

The immediate support remains at 2 Feb’s low of 28,688 pts, followed by 28,434 pts. Towards the upside, the immediate resistance is revised to 29,438 pts, and followed by 27 Jan’s high of 29,663 pts.

Source: RHB Securities Research - 5 Feb 2021