Maintain long positions. Upon returning from the holidays, the HSIF resumed its trading in high spirits, kick-starting the session with an “Upside Gap”. During the night session, it reached a high of 30,805, before paring down its gains on the back of the North American key indices’ mixed performance, to close 446 pts higher at 30,582 pts. As a result, the previous resistance points were crossed, and the index is now trading relatively firmly above the crucial 30,000-pt psychological level. The breakout from the 30,158-pt level also signalled the end of the two-week consolidation phase. While the RSI is nearing the overbought threshold again, and a minor consolidation may be developing in the coming sessions – on the back of the recent gains – the overall positive trend is expected to stay intact.

We maintain 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 can be placed at the breakeven mark.

Support levels are now pegged at 30,158 pts, followed by 29,700 pts. On the upside, the immediate resistance is now set at 30,750 pts, followed by 31,000 pts.

Source: RHB Securities Research - 17 Feb 2021