Riding on the bearish momentum, the HSIF has declined 319 pts to close lower at 17,030 pts – on the verge of breaching the 17,000 pts support.
RHB Retail Research (RHB) in a note today (July 26) said yesterday, the index began trading at 17,348 pts. It then progressed lower throughout the session, hitting the 16,975 pts intraday low and closing at 17,030 pts.
At the time of writing, it had rebounded and last traded at 17,070 pts.
The latest bearish candlestick, coupled with the downtrending RSI, affirmed that the bearish momentum is in play now.
They observed both the 20- and 50-day SMA lines are rounding downwards, exerting extra downward pressure on the index.
Premised on the bearish technical setup, it is likely the index will have a bearish breakout at the 17,000-pt level.
It may retrace towards the lower support at the 16,000-pt level.
On the upside, both moving average lines are acting as the overhead resistance.
With the impending bearish breakout, they noted that they will hold on to the negative trading bias.
Traders should retain the short positions initiated at the close of 30 May (18,126 pts).
To mitigate the trading risks, the stop-loss threshold is placed at 18,500 pts.
The first support remains unchanged at 17,000 pts, followed by 16,000 pts.
On the flipside, the first resistance has formed at 18,000 pts, followed by the higher resistance at 18,500 pts.