Maintain short positions. Amidst the risk-off sentiment, the HSIF’s December futures contract dipped to settle at 23,475 pts. On Tuesday, the index opened at 23,838 pts. After touching the 23,857-pt day high, strong selling pressure dragged it towards the 23,104-pt day low. After a steep correction, the index rebounded in the afternoon to close at 23,475 pts. It dipped 27 pts during the evening session, and last traded at 23,448 pts. The session saw the index attempt to establish an interim base near the 23,400-pt level, after forming a long lower shadow. If the threshold gives way, the index may retrace towards the 23,000-pt level. At this stage, there are no signs of a “higher high” pattern being formed, indicating that downward pressure persists. We make no change to our negative trading bias.

Traders should hold on to the short positions initiated at 24,892 pts or the closing level of 19 Nov’s evening session. To manage trading risks, the trailing-stop is implemented at 24,200 pts.

The immediate support is revised to 23,400 pts, followed by the 23,000-pt round number. Meanwhile, the immediate resistance has been moved to 23,857 pts, which was the high of 30 Nov, followed by 24,200 pts.

Source: RHB Securities Research - 1 Dec 2021