Maintain short positions. After the HSIF dropped below the 50-day SMA line yesterday, the selling pressure accelerated – the index plunged 359 pts to settle the day session at 24,564 pts. It initially began the day session at 24,658 pts. After oscillating between 24,801 pts and 24,561 pts, the HSIF closed weaker at 24,564 pts. During the evening session, it retreated 11 pts and last traded at 24,553 pts. As mentioned in our previous note, strong selling pressures exist along the 50-day SMA line. With the moving average line pointing downwards and trending lower, this may add additional pressure on the HSIF. As long as the index continues to trade below the 25,000-pt level, we think the downside risks will persist. As such, we continue to stay with our negative trading bias.

Traders are recommended to keep the short positions initiated at 24,892 pts, ie the closing level of 19 Nov’s evening session. To manage the trading risks, the stop-loss mark is adjusted to 25,188 pts from 25,500 pts.

The nearest support is revised to 24,432 pts – 10 Nov’s low – and followed by the lower support at 24,200 pts. The immediate resistance is pegged to the 25,000-pt round figure and is followed by 25,188 pts, or the low of 18 Nov.

Source: RHB Securities Research - 24 Nov 2021