The HSIF extended its correction for the fourth consecutive session. It fell 173 pts on Monday to close weaker at 18,522 pts – eyeing to close below the 18,500-pt support.
RHB Retail Research said today (May 30), that on Monday, the index started off at 18,771 pts. After touching the day’s high at 18,876 pts, the momentum faltered and a correction ensued towards the day’s low of 18,495 pts before closing in negative territory.
The bearish price action, coupled with the RSI below the 35% threshold, shows the negative momentum is in full swing.
RHB will very likely see the index close below the 18,500-pt support, followed by another leg of correction.
As the index is approaching the expiry of May futures contract, expect volatility to pick up with downside risk prevailing. Any attempt of a rebound will meet with strong resistance at the 19,000-pt level. For now, RHB holds on to the negative trading bias.
Traders should stick to the short positions initiated at 19,924 pts, or the close of 24 Apr. To minimise the trading risks, the stop-loss is set at 20,000 pts.
The immediate support is marked at 18,500 pts, followed by 17,400 pts. Conversely, the immediate resistance is pegged at 19,000 pts, followed by 20,000 pts.
