The HSIF underwent a rebound on Thursday despite facing strong selling pressure.
RHB Retail Research’s Market Dateline today (Nov 3) said the index began trading at 17,082 pts and rose to 17,486 pts before closing at 17,293 pts – thereby charting a bullish candlestick with a long upper shadow. In the evening, it gained 162 pts and last traded at 17,455 pts.
The price action reaffirms that the bears still have the upper hand, as the index is trading below the 20-day SMA line.
For the immediate session, RHB does not discount the possibility that the FCPO will attempt to break past the 20-day SMA line, but stronger resistance should emerge near the 50-day SMA line.
Meanwhile, the Bearish Engulfing pattern also coincides with the resistance level of 18,000 pts. It is more likely that the index will consolidate sideways just below the 20-day SMA line.
For now, the bearish structure remains in effect, so RHB makes no changes to their negative trading bias.
RHB recommends that traders stick to the short positions initiated at 19,140 pts, ie the close of 8 Aug. To manage the trading risks, the trailing-stop is revised to 17,762 pts from 18,500 pts. The immediate support remains at 17,000 pts, followed by 16,500 pts. Conversely, the immediate resistance is still at at 17,762 pts – 19 Oct’s high – followed by 18,000 pts.
