Maintain short positions. The HSIF experienced another bearish session yesterday, falling 371 pts to settle at 28,484 pts. The index started the day session at 29,020 pts – briefly touching the session high of 29,027 pts – before turning south. It dropped to the 28,305-pt session low and ended the day session at 28,484 pts. During the evening session, the HSIF last traded at 28,435 pts after briefly rebounding to 28,578 pts. Since the Bearish Crossover of the 20- and 50-day SMA lines, the sentiment has become risk-off, where the index has trended lower for three consecutive sessions. As mentioned in our previous note, breaching 28,563 pts will see a deeper correction and test the next crucial level at 28,000 pts. With the RSI showing negative momentum, the HSIF has a very slim chance of testing the 29,000-pt upside resistance in the near future. As it is moving in a downtrend mode, 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 riskmanagement purposes, the trailing stop is lowered to 29,027 pts.

The immediate support level revised to 9 Mar’s low of 28,283 pts and followed by the 28,000-pt round figure. Towards the upside, the immediate resistance is eyed at 28,750 pts and followed by 29,000 pts.

Source: RHB Securities Research - 24 Mar 2021