The HSIF experienced strong bullish momentum last Friday, surging 368 pts and closing higher at 17,410 pts.
RHB Retail Research Market Dateline today (Oct 30) said the index opened at 17,042 pts, and broke past the 17,200-pt resistance, rising towards the day’s high at 17,508 pts and closing at 17,410 pts – below the 20-day SMA line.
In the evening, the index retreated 235 pts and last traded at 17,175 pts. The price action affirms that an interim base has been formed at the 17,000-pt level. As long as the index stays above this level, it will attempt to climb above the 20-day SMA line.
Since the index is still trading below both the 20-day and 50-day SMA lines, the bearish setup remains intact. The SMA lines are also trending lower, placing downward pressure on the index. Despite the technical rebound in play, RHB keeps thier negative trading bias unchanged.
RHB recommends traders to stick to the short positions initiated at 19,140 pts ie the close of 8 Aug. To mitigate the trading risks, the trailing-stop is placed at 18,500 pts.
The immediate support is revised to 17,000 pts, followed by 16,500 pts. Conversely, the immediate resistance has been changed to 17,762 pts – 19 Oct’s high – followed by 18,000 pts.
