Bearish Momentum Still Looming on HSI Futures: RHB Research

The “lower low” pattern spotted on the trading of HSI Futures, hence the research house is maintaining its ‘SHORT’ positions on the derivatives.

The HSIF continued to experience selling pressure for a second consecutive session, retracing 64 points to settle the day session at 20,929 points. It started at 21,004 points yesterday, and rebounded to test the day session’s 21,215-point high. However, momentum faltered in the afternoon, with the index retreating to close at 20,929 points. It shed another 150 points in the evening session, and was last traded at 20,779 points. The latest “lower low” pattern reaffirms that the bears are still in control, and the index may retrace towards 20,400 points, followed by 20,000 points.

As the index is undergoing correction, the 20-day SMA line will remain as an overhead resistance level. Should the index stage a counter-trend rebound in the coming sessions, it would face selling pressure near 21,595 points. As bearish momentum is still in play, the research house is retaining their negative trading bias.

Traders are recommended to keep the ‘SHORT’ positions initiated at 21,129 points, or the close of 11 April. For trading risk management, the stop-loss is adjusted to 22,000 points from 22,535 points. The immediate support is revised to 20,400 points, followed by 20,000 points. Conversely, the first resistance is moved to 21,595 points (14 April’s high), followed by the 22,000-point round figure.

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