Maintain short positions. The HSIF experienced mild profit taking during the first trading session of 2022. It initially fell 185 pts and settled the day’s session at 23,266 pts. However, it managed to recoup 84 pts during the evening session to last trade at 23,350 pts. The latest price action shows the index’s recent positive movement is still capped by the 20-day SMA line. With the moving average line trending lower, the risk of seeing the index resuming its downside movement remains valid. If the index manages to cross above the moving average line and breach the 23,745-pt level, sentiment will become positive again. For now, since the index is trading below the 20-day SMA line, we stick to our negative trading bias until the trailing-stop is breached.

Traders are advised to keep the short positions initiated at 24,892 pts, ie the closing level of 19 Nov’s evening session. To mitigate the downside risks, the trailing stop is placed at 23,745 pts.

The immediate support remains at 23,070 pts – 16 Dec’s low – followed by 22,663 pts, ie 20 Dec’s low. Conversely, the immediate resistance is pegged at 23,745 pts – 15 Dec’s high – and then 24,391 pts, or the high of 13 Dec.

Source: RHB Securities Research - 4 Jan 2022