Maintain short positions. The HSIF attempted a rebound during Monday’s session, testing the resistance level near the 50-day SMA line. The index started the day session at 24,156 pts, briefly trading at the session low of 24,148 before climbing 280 pts to the session high of 24,428 pts. During the night session, the index continued its momentum, travelling towards the session high of 24,556 pts. However, it was capped by the 50-day SMA line, and closed lower at 24,405pts. With the RSI still above the 50% threshold level, there is possibility that a bullish momentum will emerge. However, since the index is still trading below both the 20-day and 50- day moving averages, we maintain our negative trading bias.

We recommend traders stay in short positions. We initiate short positions at 24,157 pts, which was the closing level of 30 Oct. For risk-management purposes, the stop-loss is set at 24,717 pts.

The immediate support is marked at 23,948 pts, followed by the 23,751-pt mark, which is the low of 6 Oct. On the upside, immediate resistance is eyed at the high of 29 Oct, which is 24,640 pts, followed by 24,717 pts

Source: RHB Securities Research - 3 Nov 2020