Maintain short positions. The HSIF gave up the previous session’s gains, shedding 606 pts to settle at 29,078 pts. Despite opening stronger at 29,311 pts, the bulls were jittery, and the index breached the 29,000-pt level to reach the day’s low of 28,909 pts. The evening session saw another round of selling pressure, with the index closing lower at 28,738 pts. The previous bullish candle was engulfed by the latest session. The price actions show that the bears had taken the lead. Failure to stay above 29,000 pts will see the index drift lower to 28,408 pts, or at least test the 28,500- pt level. The RSI, which is trending downwards, also suggests that a fresh “higher high” is unlikely in the near future. As such, we are keeping our negative trading bias.

We recommend traders maintain the short positions initiated at 30,077 pts, or the closing level of 22 Feb. For risk management purposes, the trailing-stop remains at 29,700 pts.

The immediate support is revised to 28,500 pts, followed by 28,408 pts. Towards the upside, the immediate resistance is pegged at the 29,500-pt round figure, followed by the 30,000-pt psychological level.

Source: RHB Securities Research - 5 Mar 2021