The selling pressure on HSIF intensified yesterday, dragging the index lower to close at 16,253 pts – 2024’s weakest closing, breaching the 16,276-pt support mark.
RHB Retail Research in a note today (Jan 9) said the index started off Monday’s session at 16,575 pts, and plunged to the 16,184 pts day’s low before the close.
In the evening session, the index recouped 124 pts and last traded at 16,377 pts.
The latest bearish price action affirmed the sentiment has become risk-off.
We do not discount possibilities that the index may stage a rebound in the immediate sessions, as the 20-day and 50-day SMA lines will act as strong overhead resistance.
The RSI is trending below the 50% threshold – signalling momentum is now negative.
As the stop-loss mark is breached, we will change to negative bias.
We closed out the long positions (initiated at 16,939 pts or the closing level of 28 Dec 2023) after the stop-loss at 16,276 pts was triggered.
Conversely, we initiated short positions at the close of 8 Jan, ie 16,253 pts.
To manage the trading risks, the initial stop-loss threshold is set at 17,600 pts.
After the bearish breakout, the immediate support is revised to 16,000 pts, while the lower support is marked at 15,500 pts.
On the upside, the first resistance is pegged at 16,800 pts, followed by 17,600 pts.
