The HSIF experienced another round of selling pressure on Monday, retracing 648 pts to close at 18,924 pts.
RHB Retail Research, in a note today (March 21), said the index started off Monday’s session at 19,584 pts.
After the opening, it progressed lower to hit the day’s low at 19,639 pts before the close.
In the evening, the index recouped 242 pts and last traded at 19,166 pts.
The latest session’s price action shows that the negative momentum is gaining once again as sentiment remains weak. As mentioned in the previous note, the correction will continue until the index is able to form a bullish reversal pattern, or chart a fresh “higher high” bullish candlestick.
Since the bearish momentum is in play now, the index will likely retrace to test the 18,527-pt support. For now, the 20,000-pt level has become a strong resistance.
As the bearish structure remains valid, the research house retains their negative bias.
Traders are advised to keep the short positions initiated at 21,643 pts (3 Feb’s close).
To manage the trading risks, the trailing stop is fixed at 20,750 pts.
The nearest support is adjusted lower to 18,527 pts (5 Dec 2022’s low), followed by the 18,000-pt round figure. Conversely, the nearest resistance stays at 20,000 pts, followed by 20,750 pts.
