HSI Futures Seen as Testing Immediate Resistance Level: RHB Research

Following the HSI ended in positive territory yesterday, the research house has once again, reiterated its maintenance of ‘LONG’ positions on the futures of HSI.

The HSIF is seen as maintaining its bullish posture yesterday, rising 187 points to settle at 21,955 points despite facing selling pressure. The index initially opened at 21,780 points. After setting its foot at the 21,713-point day low, it reversed and reached the 21,956-point day high before the close. The HSIF continued to climb 268 points during the evening session and last traded at 22,223 points.

As the March futures contract is nearly expiring (30 March), the research house is expecting volatility to pick up during Wednesday’s session. If the index crosses above the 22,335-point resistance, it is expected that a strong buying pressure to lift it higher. Meanwhile, the HSIF has formed an interim base near the 20-day SMA line – this will provide a downside buffer if the index retreats on profit-taking. Pending a bullish breakout, the research house is not making any change to its positive trading bias.

Traders are recommended to stick with the long positions initiated at 21,466 points or the close of 17 March’s day session.
To mitigate the downside risks, the stop-loss threshold is placed at 20,872 points. The immediate support is marked at 20,872 points – 18 March’s low – and followed by the 20,000-point round figure. Conversely, the nearest resistance is seen at 22,335 points – 28 February’s low – and followed by 23,272 points, which was the low of 31 January.

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