The HSIF experienced a fresh round of selling on Tuesday, retracing 363 pts to close weaker at 19,264 pts – erasing the gains made on Monday’s session.
RHB Retail Research cited that yesterday, the index initially opened higher at 19,611 pts and rose to test the day’s high of 19,671 pts.
However, the bullish momentum failed to follow through, as it fell to the day’s low at 19,135 pts, closing in negative zone. In the evening, the index bounced 285 pts and last traded at 19,549 pts.
The price action reaffirms that the bears are still in the driver’s seat. As mentioned in the previous note, as long as the index remains below the 20-day SMA line, the bears possess the technical advantage.
Furthermore, the 20-day SMA line is trending lower, adding extra downward pressure on the index.
Although we do not discount the possibility of seeing a counter trend rebound, the upside movement would be blocked by the 20,000- pt psychological resistance.
As the bearish momentum is clearly in play, we hold on to our negative bias. Traders are recommended to keep to the short positions initiated at 21,643 pts (3 Feb’s close).
To minimise the trading risks, the trailing stop is placed at 20,750 pts.
The immediate support remains unchanged at 19,000 pts, followed by 18,527 pts (Dec 2022’s monthly low).
On the flipside, the immediate resistance stays at 20,000 pts, followed by 20,750 pts.
