The HSIF went into a correction phase after it fell below the 50-day SMA line, to close at 18,018 pts.
RHB Retail Research (RHB) in a note today (June 24) said the benchmark index opened at 18,297 pts, underwent strong selling pressure and fell to the day’s low of 17,955 pts to close at 18,018 pts – printing a fresh bearish candlestick.
In the evening, the index fell 50 pts and last traded at 17,968 pts.
The bearish breakout upon the 50-day SMA line affirms that the bears have the technical advantage.
Expect the bearish trend to follow through, and the index reading to test the support levels of 17,500 pts and 17,000 pts.
In a typical bearish setup, we should see a formation of “lower highs” with “lower lows”.
The RSI is trending downwards below the 50% threshold, ie a negative momentum is in play.
As such, RHB stuck to a negative trading bias.
RHB noted that traders should maintain the short positions initiated at the close of 30 May (18,126 pts).
To mitigate the trading risks, the stop-loss is set at 19,000 pts.
The first support is at 17,500 pts, followed by 17,000 pts.
On the flip side, the first resistance stays at 18,500 pts, followed by 19,000 pts.
