The HSIF’s momentum shifted to negative on Tuesday, retreating 379 pts to close weaker at 18,423 pts.
RHB Retail Research, in a note today (Sept 6), said the index opened at 18,801 pts and fell to the day’s low at 18,378 pts. It closed at the 18,423 pts to print a long bearish candlestick – or fresh Bearish Marubozu.
In the evening, the index recouped 16 pts and last traded at 18,439 pts. The latest price action sees the index breaching below the 18,500-pt support.
This indicates the bullish breakout on Monday has failed. At this juncture, the index is attempting to stay above the 20-day SMA line.
Falling below the short-term moving average line will dent market sentiment, open door for correction towards the 18,000-pt level.
The price action coupled with the technical indicators, show the bearish setup remains valid. Since the counter-trend rebound is fading, RHB will stick to their negative trading bias.
Traders are recommended to hold on to short positions initiated at 19,140 pts, or 8 Aug’s close. To manage the trading risks, the stop-loss is fixed at 19,500 pts.
The immediate support is revised to 18,000 pts, followed by 17,539 pts (22 Aug’s low). Conversely, the nearest resistance is pegged at 18,500 pts and followed by 18,898 pts or the high of 4 Sep.
