The HSIF’s technical rebound has failed to follow through and halted below the 20-day SMA line. Yesterday, the index opened at 17,418 pts.
RHB Retail Research Market Dateline said today (Oct 31) that after bouncing off the 17,175 pts intraday low, it closed at 17,333 pts – below the opening price. Then, in the evening session, its upside movement was blocked by the 20-day SMA line and the index last traded at 17,393 pts.
RHB observed the RSI is trending below the 50% threshold – showing the momentum remains weak. The price action also affirmed the 20-day SMA line is acting as strong resistance.
As mentioned, both the 20-day and 50-day SMA lines are turning lower – placing extra downward pressure on the index. Despite the HSIF staging a recent technical rebound, the bearish setup remains intact for now.
For the coming sessions, RHB expects the index to resume its downward movement and test the next support at the 17,000-pt level. As such, RHB does not change their negative trading bias.
RHB advises traders to hold on short positions initiated at 19,140 pts, ie the close of 8 Aug. To minimise the trading risks, the trailing-stop is fixed at 18,500 pts.
The immediate support remains unchanged at 17,000 pts, followed by 16,500 pts. On the upside, the immediate resistance is pegged at 17,762 pts – 19 Oct’s high – followed by 18,000 pts.