Maintain short positions. The HSIF attempted to stage a rebound yesterday, only to see the index recording a mild increment of 29 pts to settle at 28,804 pts. On Wednesday, it started the session at 29,075 pts. Shortly after touching the day high of 29,153 pts, selling pressure dragged it towards the 28,640-pt day low before closing at 28,804 pts. Failure to retain the 29,000-pt level will see a weakness trend, likely to retrace towards the recent 28,370-pt low. Meanwhile, the RSI indicator is flatenning, suggesting the current selling pressure is easing. In the event the RSI manages to curve above the downtrend line, the HSIF may see a resumption of the positive momentum and, hence, challenge the upside resistances at 29,276 and 29,500 pts. Until the stop loss is triggered, we are keeping our negative trading bias.

We recommend traders stick to the short positions initiated at 30,077 pts, or the closing level of 22 Feb. For riskmanagement purposes, the trailing stop remains at 29,500 pts.

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

Source: RHB Securities Research - 11 Mar 2021