Maintain long positions. The HSIF managed to snap its five consecutive losses trend, rebounding mildly to stay above the 20-day SMA line – it recouped 27 pts yesterday to settle the day session at 28,710 pts. It started Wednesday’s session at 28,743 pts and rose to the 28,809-pt day high at midday before falling to the day low of 28,617 pts in the late afternoon. During the evening session, it declined 32 pts to close at 28,678 pts despite – at one point – jumping to touch the session high of 28,762 pts. As the RSI was observed still pointing lower, indicating a weak momentum ahead, the index may continue to consolidate near the 20-day SMA line before regaining the bullish momentum. Meanwhile, if the HSIF drops below the 20-day SMA line, it will negate the Bullish Crossver of the 20- and 50-day SMA lines and see further downward corrections. Before this happens, we retain our positive trading bias.

Traders should maintain 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 threshold is fixed at 28,550 pts.

The immediate support is marked at 28,550 pts and followed by 28,300 pts. On the upside, the immediate resistance is kept at the psychological 29,000-pt level, followed by 29,400 pts, ie the high of 1 Jun.

Source: RHB Securities Research - 10 Jun 2021