The HSIF reverted to a correction on Tuesday, falling 225 pts and closing at 17,028 pts – it is now poised to stage a bearish breakout.
RHB Retail Research (RHB) in a note today (July 31) said the index started off trading at 17,253 pts.
After touching the 17,272-pt intraday high, it retreated to the 17,006-pt intraday low and closed at 17,028 pts.
At time of writing, the HSIF was last observed trading at 17,058 pts.
Besides printing a bearish candlestick, the RSI is now trending below the 50% mark, showing that the negative momentum is still in play.
In a typical bearish setup, RHB said that they are likely to see a bearish breakout.
Should the index fall below the 17,000-pt support, it may retrace towards lower support at 16,000 pts.
Meanwhile, both the 20- and 50-day SMA lines continue to round downwards, putting downwards pressure on the HSIF.
Pending the bearish breakout, they made no changes on the negative trading bias.
Traders are recommended to retain the short positions initiated at the close of 30 May or 18,126 pts.
To mitigate the trading risks, the stop-loss threshold is placed at 18,500 pts.
The immediate support is marked at 17,000 pts with subsequent support at 16,000 pts.
Conversely, the immediate resistance is pegged at 18,000 pts and followed by 18,500 pts.
