Maintain short positions. The HSIF fell below the 50-day SMA line, declining 414 pts to settle at 28,478 pts. It started yesterday’s session at 28,915 pts, before climbing to the day’s high of 29,341 pts. However, selling pressure emerged near the high, pounding the index towards the low of 28,326 pts, before it closed at 28,478 pts. In the evening, it rebounded slightly to close at 28,672 pts after testing a low of 28,374 pts. As mentioned in our previous note, failure to sustain above 29,000 pts will result in further downward movement. We think the index may consolidate in between the interim lows of 28,370 pts and 28,000 pts, before it can stage a meaningful rebound. With the index trading below the significant 29,000-pt level, and the RSI indicator showing negative momentum ahead, we maintain 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 is set at 29,500 pts.

The immediate support is revised to 28,370 pts, followed by 28,000 pts. Towards the upside, the immediate resistance is pegged at 5 Mar’s high of 29,276 pts, followed by 29,500 pts.

Source: RHB Securities Research - 9 Mar 2021