Maintain short positions. The HSIF staged a technical rebound yesterday, rising 304 pts to reclaim the 25,000-pt level – and settling at 25,084 pts. The index gapped up to start Monday’s session at 25,049 pts. Bullish sentiment emerged early in the session, with the index surging to the 25,444-pt day high, before paring its gains to close at 25,084 pts. During the evening session, it resumed its upward movement, adding 258 pts before closing at 25,342 pts. The latest price action shows that an interim base has formed at the 24,554-pt support level. If bullish momentum follows through, and breaches the 25,444-pt immediate resistance, the index will print a “higher high” bullish pattern. At this juncture – until the trailing-stop is triggered – we retain our negative trading bias.

Traders are advised to maintain the short positions initiated at 25,683 pts, or the closing level of 17 Aug. To mitigate trading risks, the trailing-stop is set at 25,444 pts, or the high of 23 Aug.

The immediate support is revised to 24,554 pts – 20 Aug’s low – followed by the 24,200-pt round figure. The immediate resistance is revised higher to 25,444 pts, or 23 Aug’s high, followed by 25,870 pts – 19 Aug’s high.

Source: RHB Securities Research - 24 Aug 2021