The HSIF’s bearish momentum took a breather yesterday as the index rebounded 239 pts to close higher at 20,879 pts in its attempt to reclaim the overhead resistance of the 50-day SMA line.
The HSIF opened at 20,659 pts and, after falling to the 20,503-pt session low, it climbed towards the 20,993-pt session high before the close. During the evening session, the index added 42 pts and last traded at 20,921 pts.
RHB Retail Research stated in a note today (Feb 21) that the price action charted a bullish candlestick, but it was a “lower high” formation. Coupled with the RSI still below the 50% threshold, the research house deem the bears as still in control while the momentum stays weak.
The HSIF has to form a “higher high” to attract further buying pressure. As long as it stays below both 20- and 50-day SMA lines, the bearish set-up remains valid.
As such, the index may resort to moving sideways before resuming its downwards movement. Conversely, RHB are keeping its negative trading bias unchanged.
RHB advises traders to retain the short positions initiated at 21,643 pts or 3 Feb’s close. To minimise the trading risks, the stop-loss threshold is set at 22,000 pts. The immediate support sticks at 20,000 pts, followed by 19,380 pts. On the upside, the immediate resistance is still pegged at 21,348 pts – 14 Feb’s high – and followed by the 22,000-pt round figure.
