Maintain short positions as the index is not showing signs of a rebound off the 50-day SMA. The HSIF swung between a low and high of 24,629 pts and 24,987 pts before ending 124 pts higher at 24,755 pts. The index has been hovering around the 50-day SMA line over the past three sessions, and is not showing signs of staging a trend reversal. This indicates that the bearish bias is still firmly in place. Based on the latest technical picture, towards the upside, a breach of the 25,325-pt mark could signal the end of the ongoing retracement leg. Until this happens, we are keeping our negative trading bias.

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 maintained at 24,573 pts, or the low of 24 Jul, followed by the 24,000-pt round figure. Moving up, the immediate resistance is expected at the 25,000-pt round figure, followed by 25,325 pts, which was the high of 23 Jul.

Source: RHB Securities Research - 29 Jul 2020