Maintain long positions. The HSIF saw bullish momentum picking up pace yesterday, rising 146 pts to settle the day session at 26,225 pts. The index initially started off at 26,134 pts. Mild selling pressure during the early session dragged the HSIF to test the 26,030-pt day low. After establishing the intraday low, the index climbed higher to touch the 26,393-pt intraday high. Although it retraced in the late afternoon due to profit taking, strong momentum reemerged in the evening session, which lifted the HSIF 101 pts higher – it last traded at 26,326 pts. The latest session showed the bulls remain optimistic while the upward movement has becoming firmer above the 20-day SMA line. As the RSI crosses the 50% threshold, this has strengthened the probability of seeing follow-through price actions that test the 50-day SMA line. Amidst bullish momentum gaining traction, we keep to our positive trading bias.

Traders should stick with the long positions initiated at 25,638 pts, ie the closing level of 24 Aug’s day session. To manage the trading risks, the trailing-stop threshold is set at 25,700 pts.

The immediate support remains at 25,707 pts – 6 Sep’s low – and is followed by 25,295 pts, ie 27 Aug’s low. The nearest resistance is now pegged at 26,444 pts – 13 Aug’s high – and followed by 26,735 pts, or 12 Aug’s high.

Source: RHB Securities Research - 8 Sept 2021