The HSIF bounced off the immediate support as selling pressure tapered, climbing 8 pts to close at 19,707 pts.
RHB Retail Research said today (May 12) that on Thursday, the index started off at 19,696 pts. Initially, it jumped to test the 19,868 pts day high. The index fell to the 19,520 pts day low in the afternoon, before closing at 19,707 pts.
In the evening session, the index recouped 133 pts and last traded at 19,840 pts. The latest price action reaffirms that strong support has formed at the 19,500-pt level.
As long as the immediate support remains intact, the HSIF may climb upwards to test the 50-day SMA line. With the 20-day and 50-day SMA lines still trending lower, the index would likely consolidate below the moving average lines.
During this consolidation phase, the bearish setup remains valid. Hence, RHB retains a negative bias. Traders should keep the short positions initiated at 19,924 pts or the close of 24 Apr.
To manage the trading risks, the initial stop-loss threshold is placed at 20,800 pts.
The immediate support is marked at 19,500 pts, followed by 19,000 pts. On the upside, the immediate resistance is pegged at 20,500 pts, followed by 20,800 pts.
