The HSIF continued to trend lower yesterday, trading below the 20-day SMA line.
It began trading at 17,746 pts. It then rose to the 17,894-pt intraday high before closing at 17,809 pts – below the 20-day SMA line.
At the time of writing, the index last traded at 17,774 pts during the evening session.
As mentioned in our previous report, the bears will have the technical advantage if the index trends below the 20-day SMA line.
The short-term moving average line is rounding lower, putting downward pressure on the index.
The bears may attempt to test the 17,500-pt immediate support level. In a bearish setup, a bearish breakout is likely.
If this happens, the index may extend its correction towards the lower support level at 17,000 pts.
Meanwhile, the strong resistance remains intact at 18,500 pts.
As the technical setup remains bearish, they made no change to the negative trading bias.
They noted traders are advised to hold on to the short positions initiated at the close of 30 May (18,126 pts).
To mitigate the trading risks, the stop-loss is fixed at 18,500 pts.
The nearest support stays at 17,500 pts, followed by 17,000 pts, while the first resistance is still pegged at 18,500 pts, followed by 19,000 pts.