Stop loss triggered; initiate short positions. The HSIF failed to retain above the 50-day SMA line, sliding 297 pts to close the day session yesterday at 28,509 pts. It initially started on a strong note at 28,918 pts. After touching the 28,930-pt day hgh, it reversed towards the day low of 28,352 pts amid heavy selling pressure – closing at 28,509 pts after a mild rebound. The selling pressure remained during the evening session, where the index dipped 46 pts lower to close at 28,463 pts. If the negative momentum extends, it may test the 28,300-pt support level, followed by the 28,000-pt psychological level. If the HSIF continues to stay below the 50-day SMA line, the Bullish Crossover will be negated – expect the negative sentiment to persist in the coming sessions. Since the stop loss is breached, we switch to a negative trading bias.

We close out the long positions initiated at 28,894 pts, or the closing level of 25 May’s day session after the 28,550-pt stop-loss was triggered. Conversely, we initiate short positions at the closing level of 15 Jun’s day session, ie 28,509 pts. For risk-management purposes, the initial stop-loss threshold is placed at 29,100 pts.

The immediate support is revised to 28,300 pts, followed by 28,000 pts. Meanwhile, the immediate resistance remains at the 29,000-pt psychological level and followed by 29,400 pts, or the high of 1 Jun.

Source: RHB Securities Research - 16 Jun 2021