The HSIF experienced strong selling pressure yesterday, losing 501 pts to close at 19,527 pts.
RHB Retail Research, in a note today (Aug 3), said the index opened at 20,010 pts and moved lower throughout the session, hitting a low of 19,485 pts before closing at 19,527 pts.
In the evening, the index fell 124 pts and was last traded at 19,403 pts. The latest negative price action showed that the 20,000-pt level has become a strong resistance.
The index may retreat further to test the 19,250-pt support level. A breach below the immediate support level would dent market sentiment.
RHB observed that the 20-day SMA line is trending higher, lending support to the bullish setup. We will stick to our positive trading bias until the immediate support gives way.
Traders should retain the long positions initiated at 19,672 pts (the close of 27 Jul). To manage the trading risks, the initial stop-loss is fixed at 19,250 pts.
The immediate support is revised to 19,250 pts, followed by 18,545 pts, which was the low of 24 Jul. On the upside, the immediate resistance has been moved to 20,000 pts, followed by 20,421 pts (the high of 31 Jul).
