No signal to mark the end of retracement; maintain short positions. The HSIF marginally breached below the 50-day SMA line and also the previous immediate support of 24,573 pts, settling 410 pts lower at 24,557 pts. The weakness came after the index staged a counter-trend rebound from the previous four sessions, which saw the rebound capped at around the 25,000-pt round figure. All in, the index’s correction phase, which started from 7 Jul’s “Bearish Harami” formation, is still not showing signs of reaching an end. Hence, 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 now eyed at 24,372 pts – the latest session’s low. This is followed by the 24,000-pt round figure. Moving up, the immediate resistance is now seen at 25,000 pts, followed by 25,150 pts – a level near 30 Jul’s high.

Source: RHB Securities Research - 3 Aug 2020