Maintain short positions. The HSIF saw selling pressure halt at the immediate support as the index rebounded strongly, rising 238 pts to settle the day’s session at 25,017 pts. It opened at 24,695 pts and initially, the selling pressure dragged it towards the day’s low of 24,432 pts. However, buying interest emerged in the afternoon, lifting the index towards the day’s high of 25,033 pts before closing stronger at 25,017 pts. In the evening session, it pulled back 191 pts and last traded at 24,826 pts. The latest session affirms strong support established at the 24,558-pt level. Nevertheless, the bullish momentum has yet to penetrate the immediate resistance pegged at the 25,231-pt level and capped by the “lower high” bearish price trend. In the event, the index climbs higher, we expect it to meet with strong selling pressure again near the 50-day and 20-day SMA lines. As long as the index stays below the 20- day SMA line, we retain our negative trading bias.

We recommend traders to keep the short positions initiated at 25,162 pts, or the closing of 29 Oct’s evening session. To mitigate the trading risks, the stop-loss is placed at 25,513 pts.

The immediate support is established at 24,558 pts – 8 Oct’s low – followed by 24,400 pts. Meanwhile, the immediate resistance is eyed at 25,231 pts – 4 Nov’s high – followed by 25,513 pts or the high of 29 Oct.

Source: RHB Securities Research - 11 Nov 2021