Maintain short positions. The HSIF’s bullish momentum paused last Friday as it closed on a neutral tone at just 14pts higher to 23,223 pts amid strong profit-taking activities from an intraday high. It opened at 23,226 pts and touched the 23,164-pt intraday low before rebounding stronger to reach the 23,413-pt day’s peak. It then wrote off almost all the intraday profits towards the close at 23,223 pts – just 3 pts below the opening. The latest neutral candlestick with long upper shadow depicts the “Gravestone Doji” bearish reversal candlestick pattern, which suggests the immediate-term downtrend is imminent towards the 23,070-pt immediate support. This is in line with our expectation of the HSIF trading below the 20-day average line (23,541 pts) in the coming sessions. Since both immediate- and medium-term trend are biased towards a southward trend, we stick to our negative trading bias until the trailing-stop mark is triggered.

Traders should stay with the short positions initiated at 24,892 pts, ie the closing level of 19 Nov’s evening session. To mitigate the trading risks, the trailing-stop threshold is set at 23,745 pts.

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

Source: RHB Securities Research - 27 Dec 2021