Maintain short positions. The HSIF struggled to move steadily higher yesterday, as it had to recoup the intraday losses before settling 138 pts higher at 23,361 pts. It opened at 23,320 pts and immediately fell towards the 23,104-pt intraday low before rebounding stronger to reach the 23,377-pt day’s peak. It then retraced mildly to close at 23,361 pts. The HSIF last traded at 23,093 pts. Yesterday’s small white body candlestick with long lower shadow, which suggests the immediate-term downtrend remains below the 20-day average line. This is in line with our anticipation of the index continuing to trade below the average line in the coming sessions while still forming the “lower high” bearish structure. With that, 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, ie 20 Dec’s low. The nearest resistance is set at 23,745 pts – 15 Dec’s high – and followed by 24,391 pts or 13 Dec’s high.

Source: RHB Securities Research - 29 Dec 2021