Keep short positions. After falling below the 50-day SMA line, the HSIF is trying to build an interim base, rebounding 126 pts to settle at 28,836 pts. It started Monday’s session at 28,853 pts. After touching the day’s high of 29,129 pts, momentum faltered and slipped to a low of 28,601 pts. It was last traded at 28,836 pts. In the evening session, mild bullish momentum lifted the index to close at 28,995 pts. As the momentum indicator RSI is hovering below the 50% threshold, we expect the index to move sideways and consolidate near the 29,000-pt level. Meanwhile, a breakout of the 29,405-pt or 28,283-pt boundaries will see the consolidation phase ending, and the index forming a new trend. As the index is trading below the 20-day and 50-day SMA lines, we stick to 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 placed above 29,450 pts.

The support level remains at 28,500 pts, followed by 9 Mar’s low of 28,283 pts. Towards the upside, the immediate resistance is eyed at 4 Mar’s close of 29,078 pts, followed by 11 Mar’s high of 29,405 pts.

Source: RHB Securities Research - 16 Mar 2021