Stop loss triggered; Initiate long positions. The HSIF rebounded from the 20-day SMA line, recovering 50% of the losses made on 30 Nov, to settle at 26,720 pts. Yesterday, the index began the day session flat, opening at 26,600 pts. After testing the session low of 26,545 pts, buying interest emerged, pushing the index to a high of 26,810 pts. After the Bearish Marubozu of 30 Nov, the index saw strong buying interest near 26,301 pts, and selling pressure near 26,850 pts. With the RSI indicator being flattish, we think the index will likely trend sideways within this range, in coming sessions. As the stop loss was triggered, we switch to positive trading bias.

Our previous short positions, initiated at 26,589 pts or 1 Dec’s closing level, were closed out at 26,825 pts after triggering the stop loss. Concurrently, we initiate long positions. For risk-management purposes, a stop loss can be placed below 26,301 pts.

Immediate support is marked at the low of 30 Nov, or 26,301 pts, followed by 25,920 pts. On the upside, the immediate resistance is pegged at the 26,850-pt round figure, followed by the next hurdle at 27,000 pts.

Source: RHB Securities Research - 4 Dec 2020