Maintain short positions. The HSIF’s buying momentum continued yesterday, as it bounced off the support to close 187 pts higher at 23,096 pts. It opened at 22,915 pts and touched the 22,905-pt intraday low before rebounding stronger to reach 23,248 pts and retracing moderately towards the close. In the evening session, buying pressure re-emerged to move the HSIF higher. It last traded at 23,194 pts. Yesterday’s white body candlestick with an upper shadow suggests that the buying pressure has emerged above the resistance of 23,070 pts. However, the mediumterm bearish outlook remains intact below the 23,745-pt resistance, coupled with the RSI still below 40%. As such, we stick to our negative trading bias until the index triggers the trailing-stop.

Traders should keep the short positions initiated at 24,892 pts, or the closing level of 19 Nov’s evening session. To mitigate trading risks, the trailing-stop is pegged at 23,745 pts.

The immediate support is set at 23,070 pts – 16 Dec’s low – followed by 22,663 pts, or 20 Dec’s low. The nearest resistance is pegged at 23,745 pts – 15 Dec’s high – followed by 24,391 pts, which was 13 Dec’s high.

Source: RHB Securities Research - 23 Dec 2021