The HSIF reverted to a correction mode during Thursday’s session, retracing 455 pts and closing weaker at 19,147 pts.
The index initially opened at 19,600 pts, then slid to the day’s low at 19,025 pts before closing at 19,147 pts. In the evening, the index rebounded 227 pts and last traded at 19,374 pts.
The latest session sees the index charting a fresh “lower low” amid strong selling pressure.
RHB Retail research cited in a note today (March 17), that as the 20-day SMA line continues to trend lower, the negative momentum should follow though in the coming sessions
It is highly probable that the index will pull back and test the 19,000-pt support.
Breaching the support would dent market sentiment and open the door for further correction.
Meanwhile, as the index is trading far from the 20-day SMA line, there may be a countertrend rebound.
If that happens, the index would face stiff resistance at the 20,000-pt level.
“At this stage, since the bears are still in control, we are keeping the negative bias unchanged. Traders are recommended to keep the short positions initiated at 21,643 pts (3 Feb’s close),” it said.
To mitigate the trading risks, the trailing stop is placed at 20,750 pts.
The immediate support is eyed at 19,000 pts, followed by the lower support at 18,527 pts, or the low of 5 Dec 2022. On the other hand, the immediate resistance is pegged at 20,000 pts, followed by 20,750 pts.
