Maintain long positions. The HSIF moved higher in tandem with the 20-day SMA line, adding 177 pts to settle at 29,267 pts. On Friday, it opened flat at 29,070 pts, touching the day’s low of 29,056 points before rebounding. After reaching the 29,418-pt day high, minor profit-taking was seen, and the index retraced lower to close at 29,267 pts. In the evening session, bullish strength continued to be seen. It closed at 29,340 pts after trading at the session’s low of 29,233 pts. Looking at the morning and evening price actions, we see that the index closed with bullish candles, going into weekend. This shows that it is optimistic on the upside, and is likely to continue moving higher in coming sessions. As long as the downside stop-loss level stays intact, we will keep our positive trading bias.

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

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

Source: RHB Securities Research - 8 Feb 2021