Maintain long positions. The HSIF saw bearish momentum emerge on the last trading day of April, plummeting 577 pts to settle the day session at 28,530 pts. The May 2021 futures contract started Friday’s session at 29,005 pts, marginally above the 50-day SMA line. After touching the day’s high of 29,014 pts, the tides changed to see the index sliding to a low of 28,428 pts. Selling pressure continued in the evening session, with the index retreating 90 pts to end at 28,440 pts. With the index falling below the 20-day SMA line, coupled with the RSI dropping below the 50% threshold, there is a possibility of bearish momentum following through in the coming sessions. If it breaches the 28,400-pt support level, it may return to the correction phase and retest the 28,000-pt psychological level. We will maintain our positive trading bias until the stop-loss is breached.

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 revised to 28,400 pts, followed by the 28,000-pt psychological level.

The immediate resistance is revised to 28,850 pts, followed by the 29,000-pt round figure.

Source: RHB Securities Research - 3 May 2021