The HSIF continued to chart a “lower low” closing although its selling pressure is easing.
RHB Retail Research in a note today (Mar 26) said on Monday, the index opened at 16,520 pts.
It then moved between 16,639 pts and 16,438 pts before closing at 16,492 pts – declining 23 pts from Friday’s close.
In the evening, the index recouped 5 pts and last traded at 16,497 pts.
The latest price action shows correction is still in progress.
The index is trading below the 20-day SMA line – suggesting the bears are having the technical upper hand now.
In the event the bearish momentum follows through for the immediate session, it is likely to see a pullback towards the 50-day SMA line, followed by the 16,000 pts support.
In a bearish setup, support tends to be weak.
The correction will be extended until the index stages a rebound from the support.
Riding on the negative momentum, they will retain the bearish trading bias.
They advise traders to hold on the short positions initiated at 16,551 pts, ie the close of 19 Mar.
To minimise the trading risks, the initial stop-loss threshold is set at 17,251 pts.
The nearest support is marked at 16,000 pts, followed by 15,500 pts.
On the upside, the immediate resistance is seen at 17,251 pts – 14 Mar’s high – and followed by 18,000 pts.
