Maintain long positions. Despite strong profit-taking during the morning session, the HSIF managed to fend off the negative momentum, adding 159 pts to settle the day session at 24,990 pts. It started off at 25,030 pts and moved down to the day’s low of 24,649 pts. Strong buying interest lifted the index in the afternoon, and it closed at 24,990 pts. In the evening, after testing the 25,152-pt session high, it retraced and last traded at 24,956 pts. Although positive momentum failed to follow through and break past the 25,244-pt resistance level, the index managed to stay above the 20-day SMA line. Also, 10 Feb’s low of 24,649 pts was higher than 9 Feb’s low of 24,333 pts, indicating a “higher low” bullish pattern is in place. Hence, we believe the bulls remain in control of the recent trend. If the bears continue to take profit, we expect the 20-day SMA line to provide strong downside support. For now, we hold on to our positive trading bias.

We advise traders to maintain the long positions initiated at 24,704 pts or the close of 9 Feb’s evening session. To mitigate downside risks, the initial stop-loss is placed at 23,662 pts.

The immediate support remains at 24,105 pts – 4 Feb’s low – followed by 23,662 pts, or the low of 12 Jan. The immediate resistance stays at 25,244 pts – 21 Jan’s high – followed by 25,745 pts or the high of 16 Nov 2021.

Source: RHB Securities Research - 11 Feb 2022