The HSIF managed to climb above the 20-day SMA line yesterday, settling in at 21,209 points. The index initially opened at 20,895 points, RHB Research said in a note
After setting its intraday low at 20,927 points, it rose to test the 21,319-point day high before the close. The bullish momentum extended during the evening session, adding 45 points – it last traded at 21,254 points.
The latest session reaffirmed that strong support has formed at 20,500 points. Meanwhile, the 20-day SMA line is acting as downside support now.
On the upside, RHB said that the HSIF must break past the 21,758-point resistance to negate the Bearish Marubozu that formed on 13 Jun and extend its upward movement.
However, it also observed the 50-day SMA line trending lower now. In the event the index falls below this line, it may revert to correction mode again.
At this stage, since the Bearish Marubozu candlestick remains intact, we retain our negative bias. We advise traders to hold on to short positions initiated at 20,598 points or the closing of 13 Jun’s evening session.
For trading-risk management, the stop-loss threshold is placed at 22,000 points. RHB said that the immediate support remains at 20,500 points and followed by the 20,000-pt round figure. Meanwhile, the nearest resistance is adjusted to 21,758 points – 13 Jun’s high – and followed by the 22,000-point whole number.
