The HSIF attempted to stage a counter rebound but sentiment remained cautious.
Theindex gave up the bulk of its intraday gains yesterday to close at 21,007 pts – charting a bullish candlestick with a long upper shadow. In the evening session, the index rose 32 pts and last traded at 21,039 pts.
RHB Retail Research, in a not today (Feb 17), said they observe that the index was not able to sustain the positive intraday momentum due to strong profit taking in the afternoon session.
The price action affirms the formation of a strong resistance at the 21,348-pt level. For the immediate term, we think the bears possess a technical advantage as long as the index is trading below the immediate resistance. Meanwhile, we retain our view that the index still undergoing a correction phase, while staging a brief rebound near the 50-day SMA line.
Falling below this moving average line will resume the downside correction. Towards the upside, the 20-day SMA line remains as a resistance and currently trending lower.
Despite the negative momentum taking a breather, the bearish structure is still within sight. Hence, we are keeping to our negative trading bias.
Traders are advised to hold on to the short positions initiated at 21,643 pts, or 3 Feb’s close. To manage the trading risks, the stop-loss is set at 22,000 pts.
The immediate support is marked at 20,000 pts, followed by 19,380 pts. Conversely, the immediate resistance is pegged at 21,348 pts – 14 Feb’s high – followed by the 22,000-pt round figure.
