RHB Research reports that COMEX Gold failed to retain the USD1,900 level yesterday, plunging USD15.40 to close lower at USD1,888.70. The commodity initially opened higher at USD1,907.40 and then briefly touched the USD1,908.10 day high before moving sideways. However, selling pressure heightened during the US session, dragging the precious metal towards the USD1,881.60 day low before closing in negative territory and printing a fresh “lower low” bearish pattern. As the negative momentum is picking up pace again, the COMEX Gold should retrace towards USD1,880, followed by the USD1,850 support. The commodity will continue the downside movement until it forms a bullish reversal pattern near the support. In the event the bulls attempt to lift the COMEX Gold, strong resistance will emerge at USD1,912. For now, we keep to our bearish trading bias.
E-Mini Dow: Down Side risk remains
Maintain short positions. The E-Mini Dow bears took a breather yesterday, as the index rebounded 66 pts to close at 33,226 pts. It initially started the Wednesday session at 33,163 pts. At one point during the US trading session, trading become volatile, with the E-Mini Dow whipsawing between the 33,015-pt session low and 33,611-pt session high before closing at 33,226 pts and printing a “lower high” bearish pattern. The latest price action showed the bulls attempting to stage a rebound, but the buying pressure remained weak. As the bears still have the upper hand, the index should correct towards 32,680 pts and the 32,305-pt support in the coming sessions. Both the 200- and 50-day SMA lines are trending lower, indicating the bearish structure remains in place. As we expect negative momentum to follow through, we hold on to our bearish bias.
Hang Seng Index Futures: Hovering near 20,000 pts.
Maintain short positions. The HSIF moved in a tight range yesterday and consolidated sideways along the 20,000-pt level. After the session opened at 19,627 pts, it traded between 20,050 pts and 19,627 pts before closing at 19,927 pts. In the evening, it rebounded 75 pts and last traded at 20,002 pts. The index is attempting to build an interim base near 20,000 pts. However, based on the recent price action, the HSIF is still charting a series of “lower highs”, suggesting the bears remain in control. In the event it stages a rebound, 20,708-pt level will act as the immediate resistance. Meanwhile, as the bearish momentum remains in play, we think the index will correct towards 19,424 pts followed by the 18,134-pt level. At this juncture, we make no changes to our negative trading bias.
WTI Crude
Maintain short positions. The WTI Crude struggled to stay above the USD100.00 psychological level yesterday, rising USD0.32 to close at USD102.02. The commodity began the session at USD101.76 and rose to test the USD102.99 day high. Profit-taking activities dragged it towards the USD99.80 day low before the commodity rebounded to close at USD102.02. The latest session affirms that USD99.87 is acting as strong support. However, we also observed strong selling pressure existing along the 50-day SMA line. As long as the black gold continues to trade below the moving average line, RHB research thinks selling pressure may accelerate and drag the WTI Crude towards the lower support at USD93.53. Meanwhile, breaching above the 50-day SMA line should lead the commodity towards the USD105.42 resistance. At this stage, the WTI Crude is still demonstrating a bearish structure and downside risks persist. As such, we continue to stay with negative bias.
