The HSIF failed to extend the counter-trend rebound on Friday, and shed 243 pts to close at 17,954 pts – falling below the 18,000-pt level.
RHB Research, in a note today (Aug 28), said the index opened at 18,193 pts, then retraced to the day’s low of 17,936 pts before closing in negative territory. In the evening, it recouped 16 pts and last traded at 17,970 pts.
The bearish price action affirms that the breakout on 24 Aug was unsuccessful, and the 18,000-pt level has reverted to a resistance. As long as the index stays below this threshold, sentiment would remain risk-off and bears will grow stronger.
As of now, both the 20-day and 50-day SMA lines are turning lower – and continuing to exert pressure on the index. As the HSIF is poised to resume its downtrend, RHB will maintain a negative trading bias.
Traders should stick to the short positions initiated at 19,140 pts or 8 Aug’s close. To minimise the trading risks, the initial stop-loss is placed at 20,000 pts.
The immediate support is marked at 17,539 pts – 22 Aug’s low – followed by 17,000 pts. Conversely, the immediate resistance has been revised to 18,000 pts, followed by 18,500 pts.
