The research house is sticking to its negative trading bias on HS futures as the negative momentum is seen. Hence, it maintains ‘SHORT’ positions on the said futures.
The HSIF drifted lower last Friday, retreating 53 points and settling at 20,605 points. Although the index managed to stage a rebound during the day session to close at 20,605 points, it slipped another 243 points during the evening session – closing lower at 20,362 points. The latest bearish price action suggests the bulls are at their weakest state now while the bears remain in control of the correction phase. If the negative momentum follows through, the HSIF should retrace towards the 20,000-point level – hence the research house expects a whipsaw movements to happen near 20,000 points. If the psychological threshold gives way, selling pressure should increase and drag the index back to March’s low at 18,134 points. Any rebound attempt will meet strong resistance at 21,129 points. As both the 20- and 50-day lines are pointing downwards – suggesting negative momentum is in play – thus, sticking to a negative trading bias.
Traders are advised to remain with ‘SHORT’ positions initiated at 21,129 points, i.e. the close of 11 April. To mitigate the trading risks, the stop-loss threshold is fixed at 22,000 points. The immediate support is adjusted to 20,000 points and followed by 18,134 points or the low of 16 March. The first resistance is shifted to 21,129 points – 11 April’s close – and followed by 21,595 points, i.e. the high of 14 April.
