Initiate short positions below the 26,630-pt level. The HSIF formed another black candle yesterday. It closed at 26,441 pts after oscillating between a high of 26,868 pts and low of 26,266 pts. Judging from the current technical landscape, the index has posted a second consecutive black candle and marked a lower close below the 21-day SMA line, implying that the sentiment has turned negative. In addition, the 14-day RSI Indicator declined below the 50 neutral point to flash a bearish reading at 44.20 pts – this has enhanced the negative sentiment. 19 Nov’s closing has triggered our trailing stop, which we previously recommended at the 26,776-pt threshold.

Presently, the near-term resistance level is seen at 26,630 pts, which is set near the midpoint of 21 Nov’s black candle. This is followed by 27,123 pts – determined from 20 Nov’s high. Towards the downside, we are eyeing the immediate support level at the 26,000-pt psychological spot. If a breakdown arises, the crucial support is anticipated at 25,507 pts, ie the previous low of 10 Oct.

Hence, we advise traders to initiate short position below the 26,630-pt level. A stop-loss can be set above the 27,123-pt threshold to limit the risk per trade.

Source: RHB Securities Research - 22 Nov 2019