After moving above the 50-day SMA line, the HSIF reclaimed the 20-day SMA line yesterday to settle at 21,114 points, RHB Research said.
The index began Monday’s session at 21,028 points. Initially, it fell to the day’s low of 20,758 points. However, the bulls seized the bargain, lifting the index to test the day’s high of 21,320 points before the close. In the evening, it climbed 66 points and last traded at 21,180 points.
RHB said that the latest session’s low of 20,758 points is higher than 17 Jun’s low of 20,502 points.
The “higher low” indicates selling pressure is subsiding. However, towards the upside, observe that the 21,200-pt immediate resistance remains intact. Coupled with the Bearish Marubozu (formed on 13 Jun) still in force, the bearish setup is deemed valid.
As such, RHB Research said that it hold on to our negative bias until the stoploss is breached. Traders are recommended to retain the short positions initiated at 20,598 points, or the closing of 13 Jun’s evening session.
To reduce the trading risks, the stop-loss is placed at 21,400 points. The immediate support is formed at 20,500 points, followed by 20,000 points. Conversely, the first resistance remains at 21,200 points, followed by 21,758 points, or the high of 13 Jun.
