Maintain long positions. The HSIF saw profit taking near the 50-day SMA line – it declined 110 pts to settle the day session at 28,942 pts. It started Monday’s session higher at 29,102 pts and went up to the 29,250-pt high. The index failed to retain the positive momentum, however, and saw selling pressure dragging it towards the day low at 28,905 pts – it closed at 28,942 pts. The evening session was relatively unchanged, with the HSIF last trading at 28,897 pts after rebounding from the 28,772-pt session low. From the price action, both the bulls and bears were at equal strength. The index may move sideways in the coming sessions before the April futures contracts expire this week. Since the 20-day SMA line is curving higher, coupled with the RSI above the 50% threshold, the bullish momentum may return after the sideway consolidations. As such, we are keeping to our positive trading bias.

We recommend traders maintain the long positions initiated at 29,071 pts, or the closing level of 20 Apr. For risk management purposes, the stop loss is placed at 28,400 pts.

The immediate support is marked at 19 Apr’s low of 28,749 pts, followed by the 28,400-pt round figure. The immediate resistance is pegged to 11 Mar’s close of 29,276 pts and followed by the 29,400-pt round figure.

Source: RHB Securities Research - 27 Apr 2021