Although the HSIF is staging a counter-trend rebound, its momentum is weak and the technical setup remains bearish now.
RHB Retail Research in a note today (Jan 15) said on Friday, the index started off at 16,330 pts.
It oscillated between 16,424 pts and 16,138 pts before closing at 16,267 pts.
In the evening, the index rose 39 pts and last traded at 16,306 pts – charting a bullish candlestick with long upper shadow.
The latest price action saw the index printing a “higher low” but failing to chart a “higher high” candlestick.
The upper shadows during the day and evening sessions showed that the bears are still strong.
As long as the index trades below the 20-day SMA line, the bears will have the technical advantage.
The counter-trend rebound would be capped at the 16,800-pt resistance.
The HSIF should resume its downward movement in the coming sessions.
The RSI at 42% level confirms the momentum is weak now.
Premised on the technical setup, we will keep the bearish bias unchanged.
We advise traders to retain the short positions initiated at the close of 8 Jan (16,253 pts).
To minimise the trading risks, the initial stop-loss threshold is set at 17,600 pts.
The first support has formed at 16,000 pts, followed by 15,500 pts.
Conversely, the first resistance is eyed at 16,800 pts, followed by 17,600 pts.
