Maintain long positions. The HSIF paused its recent strong rally yesterday, dragging 7 pts lower to settle at 25,629 pts. The index opened at 25,639 pts and then whipsawed between the 25,677-pt session high and 25,470-pt session low, which saw it gradually bouncing off from its bottom to close slightly below the opening. During the evening session, the HSIF tumbled 247 pts and last traded at 25,382 pts – slightly above the 25,345-pt support. As the profittaking activities were anticipated earlier, the strong bearish momentum is expected to persist towards breaching the immediate support level and 20-day SMA line – 25,354 pts – before possibly rebounding upwards. The 50-day SMA line is expected to provide strong support for the HSIF. As such, we retain our positive trading bias until the stop-loss threshold is triggered.

Traders should maintain the long positions initiated at 25,636 pts or the closing level of 16 Nov. To manage the trading risks, an initial stop-loss mark is set at 24,900 pts – a level below the 50-day SMA line.

The nearest support is located at 25,345 pts – 16 Nov’s low – and followed by 25,180 pts or 15 Nov’s low. On the upside, the immediate resistance is set at 25,800 pts and followed by the 26,000-pt round figure.

Source: RHB Securities Research - 18 Nov 2021