Weak Sentiment with Downside Risks Persist on HSI Futures: RHB Research

With the weak sentiment on the futures of HSI and bears are dominating at the short term, the research house has reiterated its ‘SHORT’ positions on this derivatives.

The HSIF closed at 19,973 points yesterday, below the 20,000-pt psychological level. This was despite staging a mild rebound during the day session. After a sharp correction on Monday, the index started off the morning session at 20,043 points. It rose to test the 20,274-point day high before closing at 19,973 points. The HSIF gave up its gains during the evening session, retreating 262 points – it last traded at 19,711 points.

The price action indicates that sentiment remains weak and the bears are still taking the lead – the research house expects a downside correction towards 19,424 points, followed by the 18,134-point level. The research house has observed the index charting “lower highs with lower lows” and it has yet to establish a meaningful base with a bullish pattern. Hence, the HSIF is prone to moving lower hence the research house is keeping to its negative trading bias as a result.

Traders are recommended to retain the short positions initiated at 21,129 points, i.e. the close of 11 April. To manage the trading risks, the stop-loss threshold is fixed at 21,595 points, which was the high of 14 April.
The nearest support is marked at 19,424 points – 14 March’s low – and followed by 18,134 points or the low of 16 March. The first resistance is pegged at 20,708 points – 25 April’s high – and followed by 21,129 points, i.e. the close of 11 April

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