Maintain short positions. The HSIF continued its correction mode on Monday as it declined 131 pts to settle the day at 24,737 pts. The index initially started the session at 24,680 pts. After oscillating between 24,618 pts and 24,836 pts, it closed weaker at 24,737 pts. At the time of writing, the index rebounded mildly and last traded at 24,831 pts. The latest session saw the index continue to form a “lower low’ bearish pattern and has yet to establish a strong interim base. Furthermore, as the 50-day SMA line is moving lower, we think selling pressure near the moving average is persisting and this may prevent the index from going higher. Hence, expect the index to continue its downward movement and reach the immediate support marked at 24,558 pts. As of now, we will retain our negative trading bias.

We recommend traders to stick to 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 placed at 25,513 pts.

The nearest support remains at 24,558 pts – 8 Oct’s low – followed by 24,400 pts. The immediate resistance stays at 25,231 pts – 4 Nov’s high – followed by 29 Oct’s high, ie 25,513 pts.

Source: RHB Securities Research - 9 Nov 2021