Maintain short positions. The HSIF attempted to cross the 20-day SMA line yesterday, rising 106 pts to settle the day session at 28,519 pts – slightly below the 20-day SMA line. The index started the day session at 28,517 pts and rose towards the day high at 28,840 pts. However, it failed to retain the the gains and fell towards the 28,406-pt day low before closing at 28,519 pts. During the evening session, the HSIF rebounded higher to close at 28,614 pts after testing the evening low at 28,401 pts. As we observed the 20-day SMA line curving lower, we remain cautious – if the index failed to trade above the moving average, it may see selling pressure accelerating in the coming sessions. The HSIF needs to breach the 29,900-pt resistance level to form a “higher high” bullish pattern. Since the index is still trading below the 20-day SMA line, we keep to our negative trading bias.

We recommend traders maintain short positions initiated at 28,411 pts, or the closing level of 12 Apr. For riskmanagement purposes, the stop-loss level is placed at 29,050 pts.

The immediate support is marked at the round figure of 28,200 pts, followed by 28,000 pts. The immediate resistance is sighted at 12 Apr’s high of 28,793 pts and followed by the 29,000-pt psychological level.

Source: RHB Securities Research - 14 Apr 2021