Maintain short positions. In the final trading session of 2021, the HSIF rebounded strongly, soaring 333 pts to close at 23,451 pts – hitting the 20-day average line of 23,455 pts. It initially opened at 23,138 pts and touched the 23,097- pt intraday low but then propelled strongly to touch the 23,607-pt day high before retracing moderately towards the close. Note that the HSIF hit 2021’s lowest point on 20 Dec after which it rebounded until the last trading day of the year. The latest long white candlestick – attempting to cross above the 20-day average line – signals the immediate term bullish momentum has emerged. Nevertheless, we still think the uptrend reversal is premature as the HSIF has yet crossed the 23,745-pt resistance level. This medium term bearish bias is also supported by the RSI that is still pointing below the 50% level. With that, we keep to our negative trading bias until the trailing-stop mark is breached.

Traders should remain 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 is placed at 23,745 pts.

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

Source: RHB Securities Research - 3 Jan 2022