The correction on the HSIF was extended, so the index closed weaker at 16,742 pts – retaining the bearish technical setup.
RHB Retail Research (RHB) in a note today (Aug 6) said it opened on Monday at 16,962 pts.
At one point, it fell to the day’s low of 16,437 pts, before rebounding to close at 16,742 pts.
At the time of writing, the index last traded at 16,618 pts.
The latest price action saw strong support being formed at the 16,500-pt level.
The index may consolidate sideways above the immediate support.
However, in a bearish setup, support is weak and they may likely see a bearish breakout.
Post consolidation, the bears may attempt to break the 16,500-pt support and travel towards the lower support of 16,000 pts.
Note that both 20- and 50-day SMA lines are still trending lower, thereby exerting downward pressure on the index.
Since the technical setup remains bearish, RHB said they still hold on to a negative trading bias.
They advised traders to maintain the short positions initiated at the close of 30 May or 18,126 pts.
To mitigate the trading risks, the stop-loss has been revised to 17,500 pts.
The nearest support is marked at 16,500 pts, followed by 16,000 pts.
Towards the upside, the nearest resistance is pegged at 17,500 pts, followed by the 18,000-pt level.
