Maintain short positions. The HSIF’s bullish momentum failed to sustain last Friday, retreating 566 pts to settle at 28,710 pts. Although it started the session stronger at 29,538 pts to touch the day’s high of 29,568 pts, the bulls were eager to take profit, which saw selling pressure drag the index towards the day’s low of 28,645 pts, and end the day at 28,710 pts. Since the RSI indicator failed to cross the 50% threshold, the index will likely be rangebound in the coming sessions. Both the 20-day and 50-day SMA lines will act as overhead resistance levels, exerting selling pressure on the index. The next three sessions will be crucial to determine whether the index is able to find a foothold above the 50-day SMA line. As long as the index is trading below the trailing-stop level, we keep to our negative trading bias.

We recommend traders stick to short positions initiated at 30,077 pts, or the closing level of 22 Feb. For risk management purposes, the trailing-stop is set above 29,450 pts.

The support level revised to 28,500 pts, followed by 9 Mar’s low of 28,283 pts. Towards the upside, the immediate resistance is pegged at 4 Mar’s closing price of 29,078 pts, followed by 11 Mar’s high of 29,405 pts.

Source: RHB Securities Research - 15 Mar 2021