The counter-trend rebound on the HSIF was extended on Tuesday, and the index climbed 316 pts to close at 18,467 pts – eyeing a spot above the 20-day SMA line.
RHB Retail Research, in a note today (Aug 30), said the bourse opened at 18,149 pts, rose towards the day’s high of 18,613 pts before closing in positive territory. In the evening, the index gained 202 pts and last traded at 18,669 pts.
The HSIF is now trading above the 18,500-pt resistance – and as the evening session is still in progress – which is considered as intact.
In the event the index closes above the resistance, it will test the 20-day SMA line, followed by the 50-day SMA line.
At this juncture, RHB still expects strong selling pressure to emerge near the moving average lines. Towards the upside, the Bearish Marubozu formed on 8 Aug remains intact – the bearish setup remains valid for now. RHB will hold on to a negative trading bias until the index crosses the 20,000-pt resistance.
Traders should maintain the short positions initiated at 19,140 pts or 8 Aug’s close. To mitigate the trading risks, the initial stop-loss is placed at 20,000 pts.
The immediate support remains at 17,539 pts – 22 Aug’s low – followed by 17,000 pts. Meanwhile, the immediate resistance is at 18,500 pts, followed by 19,500 pts.
