Stay short while setting a new trailing-stop above the 29,453-pt level. The downward movement of the HSIF continues as expected, as a long black candle was formed yesterday. It lost 573 pts to close at 28,372 pts, after oscillating between a high of 29,047 pts and low of 28,275 pts. From a technical perspective, we expect the market retracement that started in early-June to continue. This is because the HSIF has marked a lower close vis- à-vis the previous sessions since 25 June, implying that near-term market is sentiment is negative. Overall, we maintain our bearish near-term outlook.

As seen in the chart, we now anticipate the immediate resistance at 29,453 pts, determined from the high of 25 June. The next resistance is seen at the 30,000-pt psychological spot. To the downside, we maintain the nearterm support at 28,149 pts, which was the previous low of 7 Dec 2017. This is followed by the 28,000-pt round figure.

Recall that on 18 Jun, we initially recommended traders to initiate short positions below the 30,800-pt level. We continue to advise staying short for now, while setting a new trailing-stop above the 29,453-pt threshold. This is in order to lock in a larger part of the profits.

Source: RHB Securities Research - 28 Jun 2018