Maintain short positions. The HSIF bears took a breather yesterday, rebounding 74 pts to settle the day session at 25,757 pts. Post a sharp correction on Tuesday, the index started Wednesday’s session mildly stronger at 25,680 pts. It touched the 25,651-pt day low and rose to test the 25,954-pt day high before reverting lower in the afternoon to close at 25,757 pts. During the evening session, it edged 43 pts higher and last traded at 25,800 pts. Although the negative momentum failed to follow through yesterday, the HSIF has yet to reclaim the 26,000-pt psychological level. As long it stays below this threshold, sentiment remains wary and we could yet see further downside risks in the coming sessions. Meanwhile, we expect to see a brief technical rebound again if the index drifts lower to test its 25,300-pt immediate support and followed by July’s low of 24,743 pts. We keep to our negative trading bias for now.

We recommend traders shift to short positions where we initiate 25,683 pts, or the closing level of 17 Aug. To mitigate the trading risks, the initial stop-loss threshold is set at 26,450 pts.

The immediate support is marked at the 25,300-pt round figure and followed by 24,743 pts, ie 27 Jul’s low. The immediate resistance remains at 26,000 pts – the psychological level – followed by 26,735 pts, or 12 Aug’s high.

Source: RHB Securities Research - 19 Aug 2021