Stay short while setting a stop-loss above the 29,255-pt resistance. The HSIF ended higher to form a white candle yesterday. It rose to a high of 28,990 pts during the intraday session, before ending at 28,905 pts for the day. Based on the current outlook, we maintain our negative view, as the index has remained below the recent high of the 29,255-pt resistance. Technically speaking, as long as the bearishness of 4 Mar’s “Shooting Star” pattern is not nullified, this shows the downside swing is still in effect. As such, we believe the bears still have control over the market.

Based on the daily chart, the immediate resistance is now anticipated at 29,255 pts, which was determined from the high of 4 Mar’s “Shooting Star” pattern. The next resistance will likely be at the 30,000-pt psychological spot. Towards the downside, the near-term supports are maintained at 27,781 and 27,450 pts, ie the previous lows of 15 Feb and 8 Feb.

Consequently, we advise traders to maintain short positions, given that we initially recommended initiating short below the 28,550-pt level on 12 Mar. A stop-loss can be set above the 29,255-pt mark to minimise the risk per trade.

Source: RHB Securities Research - 13 Mar 2019