The HSIF’s downside movement extended yesterday (June 26), albeit at a slower rate.
RHB Retail Research, in a note today (June 27), said the index opened lower at 18,877 pts and, after oscillating between 19,022 pts and 18,676 pts, closed at 18,796 pts. During the evening session, it recouped 98 pts and last traded at 18,894 pts.
This latest session saw the HSIF chart a fresh “lower low”, suggesting that the bearish structure remains intact.
If the index stages a counter-trend rebound, it will test the 20-day SMA line or 19,250-pt resistance.
Meanwhile, an extension of the bearish setup will see it retrace its movement towards 18,500 pts, followed by the 18,000-pt level.
The correction will continue until the HSIF forms a rejection candlestick near the support. Since the downside risk persists, RHB holds on to a negative trading bias.
RHB recommends traders retain the short positions initiated at 18,875 pts or the close of 23 Jun.
To mitigate the trading risks, the initial stop-loss threshold is placed at 19,896 pts. The nearest support is marked at 18,500 pts and followed by 18,000 pts. Conversely, the immediate resistance is pegged at 19,250 pts and followed by 19,896 pts, ie the close of 19 Jun.
