The HSIF posted sideways movements and consolidated below the 18,000-pt level yesterday while the bearish setup remained intact.
RHB retail research said today (Sept 21) that the index started trading at 18,182 pts. After falling to the 17,879 pts day low, its movement closed at 17,942 pts. During the evening session, the HSIF’s movement operated within a tight range of 17,974 pts and 17,854 pts before last trading at 17,965 pts.
The price action showed the bulls attempting to reclaim the 18,000-pt psychological level. However, the RSI so far is trending below the 50% threshold, showing that momentum remains weak.
Coupled with the 20-day SMA line turning lower, RHB expects selling pressure to be heightened during the coming sessions. As long as the index’s movements stay below both the 20- and 50-day SMA lines, the correction phase is deemed valid.
Post consolidation, they expect a fresh leg on the downside. As such, RHB continues to hold on their bearish trading bias.
Traders should retain the short positions initiated at 19,140 pts or the close of 8 Aug. To manage the trading risks, the stop-loss threshold is set at 19,500 pts.
The first support is marked at 17,539 pts – 22 Aug’s low – and followed by 17,000 pts. Conversely, the first resistance sticks at 18,500 pts, followed by 18,898 pts, ie the high of 4 Sep.