Maintain short positions. The HSIF displayed strong downward movement yesterday, as it settled 295 pts lower at 23,066 pts – crossing below the immediate support of 23,070 pts. It opened at 23,377 pts and hit the 23,385-pt intraday high before shifting strongly southwards towards the end of the session. The HSIF reached the 23,014-pt day low before rebounding moderately at the close at 23,066 pts. The index last traded at 23,063 pts. Yesterday’s long black body candlestick, signals a bearish continuation amid the “lower high” structure while breaching below the support level. This is in line with our expectaion of the HSIF continuing to trade below the average line after the “Gravestone Doji” bearish reversal candlestick appeared near the recent high. As such, we stick to our negative trading bias.

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 placed at 23,745 pts.

The immediate support is pegged at 22,663 pts – 20 Dec’s low – and followed by 22,000 pts. The nearest resistance is set at 23,070 pts – 16 Dec’s low – and followed by 23,745 pts or 15 Dec’s high.

Source: RHB Securities Research - 30 Dec 2021