Maintain long positions. The HSIF was buoyed by risk-on sentiment, rising 278 pts to settle at 30,975 pts. Yesterday, the index gapped up to open at 30,501 pts. Due to strong buying pressure, it moved up towards the day’s high of 31,088 pts, before closing at 30,975 pts. The evening session was relatively neutral, with the index closing at 30,912 pts after testing the session’s low of 30,820 pts. The momentum indicator RSI is seen to be slanting upwards, showing that the index is gaining bullish momentum. For the past 10 sessions, the HSIF has been moving higher on an average trading range (ATR) of 265 pts. By extrapolating 1x ATR from 30,975 pts, we estimate to see the nearest resistance marked at 31,240 pts, and support at 30,710 pts. As long as the downside stop-loss level stays intact, we will 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 is set at 30,200 pts.

The immediate support is revised higher to 30,710 pts, followed by 30,445 pts. Towards the upside, the immediate resistance is pegged at 31,240 pts, followed by 31,500 pts.

Source: RHB Securities Research - 18 Feb 2021