The HSIF failed to break past the 50-day SMA line on Tuesday and experienced a correction.
RHB Retail Research (RHB) in a note today (Aug 21) said the index began trading at 17,606 pts and initially reached the day high at 17,775 pts.
It then progressed lower, hitting the intraday low at 17,464 pts before closing at 17,533 pts.
During the evening session, the HSIF fell 173 pts and last traded at 17,360 pts.
As the RSI is heading downwards – suggesting the bullish momentum is slowing down – the index is likely to pull back to retest the 20-day SMA line.
Meanwhile, strong support should emerge at 17,000 pts.
As long as the HSIF stays above this support level, RHB said they held on to the positive trading bias.
They recommended traders maintain the long positions initiated at 17,608 pts or the close of 19 Aug.
To manage the trading risks, the stop-loss threshold is marked at 17,000 pts.
The first support is marked at the aforementioned 17,000 pts and followed by the 16,500-pt level.
Conversely, the first resistance is pegged at 18,000 pts and followed by the next resistance at 18,500 pts.
