The HSIF attempted to stage a technical rebound yesterday – it bounced off its intraday low to close 192 pts higher at 16,468 pts, marking a new high for the week.
RHB Research in a note today (Dec 15) said it started mildly lower at 16,271 pts and whipsawed in a positive tone between 16,128 pts and 16,685 pts before ultimately closing higher at 16,468 pts.
In the evening, the index rose another 164 pts to close at 16,632 pts. The formation of a “bullish engulfing” pattern signals a technical rebound ahead, targeting the 17,000-pt level.
The improvement in short-term momentum is supported by the sharp rebound of the RSI to near 40% yesterday.
However, the RSI being in negative territory indicates overall weak momentum, and suggests that the rebound will be short-lived.
The short-term rebound is expected to be limited by the 17,000-pt level before reversing towards the 16,000-pt support level.
Despite the likely short-term rebound ahead, RHB maintains their bearish trading stance based on the medium-term outlook.
