Maintain short positions. The HSIF continued to extend its rebound during the latest session, following the recent recapturing of the 50-day SMA line. At the close, the index settled 270 pts stronger at 24,610 pts. While the HSIF has shown initial signs of gaining a relatively good footing above the aforementioned SMA line, we continue to believe the recent rebound will still likely be a counter-trend one. This implies that the index’s correction phase may still be extending. Hence, we are keeping to our negative trading bias.

We advise traders to stay in short positions. We initiated these at 24,212 pts, which was the closing level of 12 Jun. For risk-management purposes, a stop-loss can now be placed at above the 25,183-pt threshold.

The immediate support is revised to 24,200 pts, ie near the latest low. This is followed by 24,000 pts – a round figure near the 50-day SMA line. Moving up, the immediate resistance is revised to 25,183 pts, which was the high of 9 Jun. This is followed by 25,743 pts, or the high of 11 Mar.

Source: RHB Securities Research - 22 Jun 2020