Maintain long positions. The HSIF fell below the 20-day SMA line yesterday, losing 321 pts to settle at 25,308 pts. The index started off the day session on a weaker note, gapping down to open at 25,350 pts. After spiralling between 25,373 pts and 25,188 pts, it closed at 25,308 pts. Negative sentiment continued dragging the market in the evening session, where the index plunged 383 pts and was last traded at 24,925 pts – breaching the 50-day SMA line. After the steep decline, the index may attempt to find an interim support at 24,900 pts. If the threshold gives way, we expect further downside correction ahead. At this stage, both the 20-day and 50-day SMA lines will act as resistance levels. We keep our positive trading bias until the stop-loss threshold is breached.

Traders should retain the long positions initiated at 25,636 pts or the closing level of 16 Nov. To manage trading risks, an initial stop-loss is placed at 24,900 pts.

The nearest support is marked at 24,900 pts, followed by 24,432 pts or 10 Nov’s low. On the other hand, the immediate resistance is now pegged at 25,188 pts (18 Nov’s low), followed by 25,440 pts, or the high of 15 Nov.

Source: RHB Securities Research - 19 Nov 2021