Bearish pressure on the HSIF was contained last Friday, and the index underwent a rebound and closed at 16,345 pts, while heading for the territory above the 20-day SMA line.
RHB Retail Research in a note today (Mar 11) said that day, the index opened at 16,241 pts.
After establishing the day’s low of 16,216 pts, it rose to the day’s high of 16,527 pts before closing at 16,345 pts.
In the evening, the positive price action followed through – the index added 31 pts and last traded at 16,376 pts.
The latest positive price action indicates that the Bearish Marubozu formed on 5 Mar is weakening.
If the HSIF climbs above the 20-day SMA line, it may likely breach the 16,600-pt resistance.
The bullish breakout will see a shift in market sentiment. RHB believe strong resistance may emerge at the gap-down and at 16,600 pts.
The house will maintain a negative trading bias until the index closes above the 16,600-pt threshold.
Traders should stick to the short positions initiated at 16,253 pts (the close of 8 Jan).
To mitigate the trading risks, the stop-loss has been revised upwards to 16,600 pts, from 17,000 pts.
The nearest support is marked at 16,000 pts, followed by 15,500 pts.
Conversely, the immediate resistance is at 16,600 pts, followed by 17,000 pts.
