Technical Buy

Hi-P Ltd – Daily timeframe (Update from 11 April 2018)

*Entry Price: 1.58         Stop loss : 1.43       Take profit : 1.86

*Hi-P Ltd will be added to the Phillip 20 Portfolio once the trade is triggered

Current Sentiment: Bullish

Support 1: 1.500                   Resistance 1: 1.790

Support 2: 1.315                   Resistance 2: 1.860

Price failed to hold on to the 1.79 support area after the last update and broken the uptrend structure of Higher Highs (HH) and Higher Lows (HL). After price broke below the 1.79 critical support area on 26/04/18, the selloff accelerated dragging the Relative Strength Index (RSI) into extreme oversold condition at 23, suggesting for a mean reversion higher soon. RSI measures momentum. An RSI reading above 70 represents overbought condition while an RSI reading below 30 represents oversold condition.

Moreover, the sharp selloff on 03/05/18 broke a new 8-month low at 1.45, but the buyers seemed ready to defend the 1.50 psychological round number. At the end of the day, price closed at the daily high at 1.57 resulting in the formation of a bullish candlestick pattern, hammer with increasing volume signals a possible reversal higher.

With the current hammer rejection off the 1.50 psychological round number and oversold RSI, a near-term bottom at 1.45 might be forming as the bulls target the 1.79 resistance area next followed by 1.86.