Stop loss triggered; Initiate long positions. Although blocked by the overhead resistance of the 50-day SMA line, the HSIF recorded a positive day session yesterday, adding 51 pts to settle at 29,071 pts and breaching the 29,050- pt resistance. The index started the session at 28,894 pts. After establishing the day’s low of 28,830 pts, it reversed to the day’s high of 29,209 pts and closed at 29,071 pts. In the evening, selling pressure remained throughout the entire session, with the index closing at 28,695 pts. Since the index is sandwiched between the 20- and 50-day SMA lines, we may see whipsaw movement ahead. The index has to stay above the 20-day SMA line so that the moving average line can curve up in the coming sessions. Since the stop loss is breached, we shift to positive trading bias.

We closed out our short positions initiated at 28,411 pts, or the closing level of 12 Apr after the stop loss at 29,050 pts was triggered. Conversely, initiate long positions at 29,071 or the closing level of 20 Apr. For risk-management purposes, the stop loss is placed at 28,223 pts.

The immediate support established at the 28,400-pt round figure – this is followed by 12 Apr’s low of 28,223 pts. The immediate resistance is pegged at 29,150-pt round number and followed by 11 Mar’s close of 29,276 pts.

Source: RHB Securities Research - 21 Apr 2021