The HSIF traded sideways below the 50-day SMA line yesterday, settling with a mild gain of 80 pts at 16,373 pts with the downtrend still intact.
RHB Retail Research in a note today (Apr 19) said the index opened at 16,294 pts, fluctuating within a tight range of 16,518 pts and 16,166 pts before closing above the opening level at 16,373 pts. In the evening, it edged 18 pts lower and last traded at 16,355 pts.
The sideways movement below the SMA line is likely to be followed by a resumption of the downwards movement towards the 16,000-pt support – supported by the weak RSI in negative territory.
They anticipate the potential further downtrend to be followed by consolidation near the abovementioned support before potentially demonstrating a rebound.
Amidst the trading below the SMA line, we maintain a bearish trading bias.
Traders are advised to keep to 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 placed at 17,251 pts.
The nearest support is marked at 16,000 pts, while the lower support is at 15,500 pts.
On the upside, the immediate resistance remains at 17,251 pts – 14 Mar’s high – followed by the higher resistance of 18,000 pts.
