The HSIF extended its bearish structure by printing a fresh “lower low” and “lower high” pattern – it fell 625 pts to close at 15,251 pts, dipping below the 15,500-pt support level.
RHB Retail Research in a note today (Jan 18) said the index started yesterday’s session at 15,888 pts. It moved lower throughout the session, touching the low of 15,198 pts before the close.
In the evening session, the index recouped 23 pts and was last traded at 15,274 pts. The bearish breakout at the 15,500-pt support level reaffirms our view that support is weak in a bearish environment, while the resistance will be strong and block upside movement.
For now, the 16,000-pt and 16,500-pt levels will provide resistance. On the downside, the correction will continue until the index is able to form a bullish reversal candlestick or chart a “higher high” candlestick.
As bearish momentum is now increasing its speed, we maintain the negative bias.
Traders should keep the short positions initiated at the close of 8 Jan (16,253 pts). To mitigate the trading risks, the initial stop-loss is fixed at 17,600 pts.
Due to the latest bearish breakout, the immediate support is adjusted lower to 15,000 pts, followed by 14,000 pts. The immediate resistance is revised to 16,000 pts, followed by 16,500 pts.
