Maintain short positons. The HSIF rebounded higher last Thursday to settle at 26,411 pts, or 86 pts better than Wednesday’s session. Due to the Christmas eve holiday break, there was only a half-day trading session. The index initially gapped down 31 pts last Thursday to open at 26,339 pts. The bulls found footing near the 26,245-pt low and pushed the HSIF towards the day high at 26,471 pts. It then settled at 26,410 pts after some profit taking. Although the index rebounded higher during Wednesday and Thursday’s sessions, we think this was due to the bears closing their short positions before the long weekend. However, the RSI indicator is pointing south, indicating that the momentum remains weak. As such, we think it will be an uphill task for the HSIF to pierce higher. Hence, we are keeping to our negative trading bias.

We recommend traders maintain short positions. We initiated such positions at 26,427 pts, or the closing level on 7 Dec. For risk-management purposes, stop-loss level can be placed above the 26,810-pt mark.

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

Source: RHB Securities Research - 28 Dec 2020