The HSIF’s recent rebound failed to follow through as it was blocked by the 20,000-pt resistance and closed at 19,912 pts. Yesterday, the index opened at 19,953 pts before jumping to the 20,191 pts day high.
RHB Retail Research, inn a note today (May 17), said the momentum then faltered, with a correction towards the 19,840 pts day low before the close. In the evening, the index declined 28 pts and last traded at 19,884 pts.
The HSIF’s latest price action reaffirmed the 20,000-pt level as a strong resistance.
The index is still trading below the 50-day SMA line. Meanwhile, both the 50- and 20-day SMA lines continue trending lower – strengthening the bearish setup.
Since the technical signal is showing the bears are still in control, we will retain the negative bias.
RHB recommend traders to hold on short positions initiated at 19,924 pts or 24 Apr’s close. To mitigate the trading risks, the initial stop-loss threshold is placed at 20,800 pts.
The immediate support sticks at 19,500 pts, followed by 19,000 pts. On the upside, the first resistance remains unchanged at 20,000 pts, followed by 20,500 pts.
