Maintain long positions. The HSIF saw its bullish momentum weakening last Friday, with the index falling 389 pts to end the day session at 28,634 pts – testing the border of the 20-day SMA line. It started the day session at 29,090 pts and, after touching the session high of 29,113 pts, it retraced to the 28,548-pt session low. The HSIF pared the earlier losses during the evening session, closing at 28,650 pts after an attempt to test the 28,709-pt session high. To retain the current counter-trend rebound structure, the index needs to stay above the 20-day SMA line. Falling below this line may see the bears being prone to profit-taking avtivities, as well as the emergence of selling pressure. As long as the trailing stop remains intact, though, we keep to our positive trading bias.

We recommend traders maintain long positions, which were initiated at 28,385 pts, or the closing level of 29 Mar. For risk-management purposes, the trailing stop is set at 28,470 pts.

The immediate support is marked at 7 Apr’s low of 28,516 pts and followed by 28,250 pts. Meanwhile, the immediate resistance is pegged at 9 Apr’s high of 29,113 pts and followed by 11 Mar’s 29,276-pt closing level.

Source: RHB Securities Research - 12 Apr 2021