The HSIF’s bulls took a breather during Monday’s session as the index declined 85 pts and closed at 16,634 pts.
RHB Retail Research in a note today (Feb 27) said yesterday, it started trading at 16,718 pts and oscillated between 16,823 pts and 16,583 pts before closing in negative territory.
In the evening, the index recouped 22 pts and last traded at 16,656 pts.
The latest bearish candlestick, coupled with the RSI rounding downwards, suggest the bullish momentum is slowing down.
The index is likely to extend the sideways movement below the 17,000-pt resistance.
In the event the selling pressure increases, the index may pull back towards the 50-day SMA line.
As mentioned in the previous note, RHB believe the bears will possess the upper hand should the index stay below the 17,000-pt level.
Breaching below the 50-day SMA line will resume the correction phase.
Since the stop-loss of 17,000 pts remains intact, they make no changes to our bearish trading bias.
Traders are advised to keep to the short positions initiated at 16,253 pts (the close of 8 Jan). To mitigate the trading risks, the stop-loss is fixed at 17,000 pts.
The first support is established at 16,200 pts, followed by 15,500 pts. Towards the upside, the first resistance is eyed at 17,000 pts, followed by 18,000 pts.
