Maintain short positions until a reversal is confirmed. The HSIF formed a white candle to hand in a 489-pt gain to close at 24,895 pts – the high was posted at 25,030 pts. The closing level placed the index slightly above the 50-day SMA line. The index has been trading around the said SMA line over the past seven sessions. A firm upside breach of this level in the coming sessions could signal a possible positive price reversal – to mark the end of the retracement phase that started from 7 Jul’s “Bearish Harami” formation. For now, we are keeping our negative trading bias.

We recommend traders stay in short positions. We initiated these at 24,920 pts, ie the closing level of 16 Jul. For riskmanagement purposes, a stop-loss can now be placed at the breakeven mark.

The immediate support is revised to 24,500 pts, followed by 24,185 pts – the low of 3 Aug. Conversely, the immediate resistance is now eyed at 25,150 pts – a level near 30 Jul’s high. This is followed by 25,500 pts

Source: RHB Securities Research - 12 Aug 2020