Maintain short positions. After failing to establish a foothold above the 50-day SMA line, the HSIF continued to move on a downward trajectory, falling 139 pts to settle the day session at 28,370 pts. On Wednesday, it initially started stronger at 28,548 pts to test the 28,571-pt day high. It then reverted to a downward momentum, retracing to 28,357 pts before closing at 28,370 pts. The evening session saw the selling pressure heightened, where the index plunged another 162 pts to last trade at 28,208 pts. As the HSIF is moving further away from the 20- and 50-day SMA lines, the sentiment is growing weaker. Coupled with the RSI staying below the 50% threshold, we will likely see the index continuing to trade below the 50-day SMA line while witnessing the Bearish Crossover of moving average lines in the coming sessions. Premised on this, we keep to our negative trading bias.

We recommend traders stay in short positions initiated at the closing level of 15 Jun’s day session, ie 28,509 pts. For risk-management purposes, the initial stop-loss threshold is set at 29,100 pts.

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

Source: RHB Securities Research - 17 Jun 2021