Maintain short positions. The HSIF extended its correction trajectory last Friday, shedding 327 pts to settle the day at 24,868 pts. The index initially started Friday’s session at 24,918 pts. It attempted to climb above the 25,000-pt level and test the day’s high of 25,018 pts. But the positive momentum failed to sustain, and saw the index retracing in the afternoon to reach the day’s low of 24,671 pts before the close. Despite its US peers moving higher in the evening session, the index continued to experience selling pressure, falling 147 pts and last trading at 24,721 pts. With the latest session, the index has undergone a correction for two consecutive weeks. Amidst the risk-off sentiment, the negative momentum will likely follow through and drag the index lower, testing the 24,558-pt immediate support. We observe the 50-day SMA trending lower and acting as an overhead resistance now. As the index is extending its correction with the “lower highs and lower lows” bearish pattern, we keep to our negative trading bias.

Traders should retain the short positions initiated at 25,162 pts, or the closing of 29 Oct’s evening session. To manage the trading risks, the stop-loss threshold is set at 25,513 pts.

The nearest support has changed to 24,558 pts – 8 Oct’s low – followed by the 24,400-pt whole number. The immediate resistance remains at 25,231 pts – 4 Nov’s high – followed by 29 Oct’s high, ie 25,513 pts

Source: RHB Securities Research - 8 Nov 2021