After falling for seven consecutive sessions, the HSIF staged a strong rebound yesterday.
RHB Retail Research in a noted today (Jan 12) said the index began trading at 16,155 pts. It jumped to the 16,495 pts day’s high before closing at 16,346 pts – printing a bullish candlestick.
In the evening session, it gave up 110 pts and last traded at 16,236 pts. The latest price action showed the bears are taking a breather now as the index is approaching the support at the 16,000-pt level.
Since the selling pressure has moderated, the HSIF would test the 16,800-pt resistance level.
However, in a bearish environment, resistance will be strong.
Furthermore, both the 20-day and 50-day SMA lines are still tranding lower – providing downward pressure on the index.
Although the index may undergo further rebound, we will stick to the negative bias until the 17,600-pt resistance mark is breached.
We recommend traders to hold on short positions initiated at the close of 8 Jan (16,253 pts).
To manage the trading risks, the initial stop-loss threshold is fixed at 17,600 pts.
The immediate support is marked at 16,000 pts, followed by the lower support at 15,500 pts.
On the other hand, the nearest resistance is pegged at 16,800 pts, followed by 17,600 pts.
