Maintain short positions while tightening up risk management. The HSIF ended the latest session on a weak note, shedding 546 pts to close at 24,685 pts. At one point, it reached a low of 24,573 pts to test the 50-day SMA line. The weak session came after the index failed in its attempt to cross above the 200-day SMA line in the prior two sessions. All in, the index’s retracement which started from 7 Jul’s “Bearish Harami” formation is still firmly in place.

We recommend traders stay in short positions. We initiated these at 24,920 pts – the closing level of 16 Jul. For risk-management purposes, a stop-loss can now be placed above 25,325 pts.

The immediate support is revised to 24,573 pts – the latest low, followed by the 24,000-pt round figure. Moving up, the immediate resistance is pegged at the 25,000-pt round figure, followed by 25,325 pts – the high of 23 Jul.

Source: RHB Securities Research - 27 Jul 2020