Maintain short positons. The HSIF rebounded yesterday to settle at 26,325 pts, or 195 pts better than Tuesday session. Initially the index gapped down to open at 26,012 pts. The bulls seized the opportunity to buying at low, pushing the index towards day high at 26,357 pts and closed at 26,325 pts. The evening session was rather neutral, the index closed at 26,370 after tested the low of 26,293 pts and the high of 26,397 pts. Based on last two sessions, buying interest appear near the physcological level of 26,000 pts. We think the index may see an interim rebound to test the upside resistance near the 20-day SMA line. However, since the RSI line is still trending lower, we think the weak momentum will not be able to pierce through the overhead resistance. As such, we are keeping to our negative trading bias.

We recommend traders to maintain short positions. We initiated such positions at 26,427 pts, or the closing level on 7 Dec. For risk-management purposes, we adjust the stop-loss level to 26,810-pt level.

The immediate support marked at 25,920 pts, followed by 9 Nov low ie 25,576 pts. On the upside, the immediate resistance is revised to the 7 Dec high of 26,729 pts and followed by next hurdle at 26,932 pts.

Source: RHB Securities Research - 24 Dec 2020