Maintain long positions. The HSIF retraced lower for a fourth consecutive session yesterday, declining 58 pts to settle the day session at 28,748 pts. On Monday, it opened at 28,880 pts to touch the 28,938-pt day high. It then turned south towards the day low of 28,528 pts before closing at 28,748 pts. The HSIF rebounded 15 pts higher during the evening session to close at 28,763 pts after testing the 28,672-pt session low. Despite the index trending lower for the past four sessions, the RSI managed to remain above the 50% threshold. If the HSIF manages to find footing near the 20-day SMA line, we may see a rebound in the coming sessions. Otherwise, falling below this line may unveil the correction phase that re-tests May’s low. Before the stop loss is breached, we keep to our positive trading bias.

Traders are recommended to hold on to the long positions initiated at 28,894 pts, or the closing level of 25 May’s day session. For risk-management purposes, the stop-loss level is set at 28,550 pts.

The immediate support is placed at 28,750 pts and followed by 28,550 pts. On the upside, the immediate resistance remains at the psychological 29,000-pt level, followed by 29,400 pts, ie the high of 1 Jun.

Source: RHB Securities Research - 8 Jun 2021