The HSIF experienced strong selling pressure on the eve of the market holiday, falling 221 pts and closing at 16,746 pts.
RHB Retail Research in a note today (Apr 5) said the index started off trading at 16,967 pts and, after touching the 17,072-pt day high, it pulled back to the 16,718-pt day low and closed at 16,746 pts.
In the evening, the HSIF was unchanged at 16,746 pts.
The latest bearish price action showed that sentiment remains cautious despite the index trading above the 20-day SMA line.
The short-term moving average line is moving upwards, suggesting the short-term trend remains bullish.
However, they expect strong resistance to emerge at 17,251 pts.
In the event the correction follows through – with the HSIF falling below the 20-day SMA line – this will attract further selling pressure.
For now, they retain the bearish trading bias until the index climbs above the 17,251-pt mark.
Traders are recommended to keep the short positions initiated at 16,551 pts, ie the close of 19 Mar.
To manage the trading risks, the initial stop-loss threshold is set at 17,251 pts.
The immediate support is marked at 16,000 pts and followed by 15,500 pts.
On the other hand, the immediate resistance is still pegged at the abovementioned 17,251 pts – 14 Mar’s high – and followed by 18,000 pts.
