Maintain long positions. The HSIF consolidated near the 20-day SMA line, retreating 97 pts to settle at 29,170 pts. Yesterday, it gapped up 126 pts to open at 29,466 pts, and moved towards the day-high of 29,624 pts. Despite the strong display during the early part of the morning, selling pressure was seen near the 28,688-pt resistance level. The index retraced towards the day-low of 29,165 pts, and closed at 29170 pts. In the evening, it rebounded to close at 29,216 pts after testing the session’s high of 29,358 pts. As the RSI indicator is flattening sideways, the momentum is rather neutral. We expect the index to move in a narrow, range-bound manner ahead of the festive season. The 20- day SMA line is trending higher, indicating that the uptrend is still intact, and lending support towards the index. As long as the downside stop-loss level remains intact, we will keep our positive trading bias.

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

The immediate support is 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 p

Source: RHB Securities Research - 9 Feb 2021