The HSIF is having difficulty in crossing above the 20-day SMA line as the bearish setup remains intact.
RHB Retail Research in a noted today (Jan 29) said the index opened Friday’s session stronger at 16,195 pts and rose to the day’s high of 16,313 pts.
However, the momentum eased off in the afternoon, and the index fell to day’s low of 15,892 pts and closed at 15,952 pts – below the 20-day SMA line (16,080 pts).
In the evening, it recouped 132 pts and last traded at 16,084 pts.
The evening session is still in progress, so the index may make a fresh attempt to close above the 20-day SMA line in the immediate session.
However, the higher hurdle would be the 50-day SMA line, followed by the 17,000-pt resistance.
In a bearish setup, resistance tends to be strong. If the index stays below the 17,000-pt level, we believe the bears will possess the technical advantage.
For now, both 20-day and 50-day SMA lines are trending lower, putting downward pressure on the index.
At this juncture, we still hold on to a bearish trading bias.
Traders should maintain the short positions initiated at the close of 8 Jan (16,253 pts).
To manage the trading risks, the initial stop-loss is set at 17,000 pts.
The nearest support has formed at 15,829 pts – the low of 25 Jan – followed by 15,000 pts.
Towards the upside, the nearest resistance is pegged at 17,000 pts, followed by 17,600 pts.
