In its latest technical analysis on the HSI futures, RHB Research has maintained ‘SHORT’ positions on this derivatives with negative bias.
The HSIF faced strong selling pressure near the 20-day SMA line yesterday, retreating 74 points to settle at 20,645 points. The index started off at 21,045 points and rose to the 21,216-point day high. However, the tide changed in the afternoon – it fell to the 20,603-point day low and closed in negative territory. The negative momentum extended during the evening session and the HSIF lost another 489 points – it last traded at 20,156 points. The negative price action affirms that the 20-day SMA line is now acting as strong resistance with the bears firmly in grip of the correction.
As the research house has observed both the 20- and 50-day SMA lines are trending lower, it expects negative momentum to follow through in the coming sessions. The index should test the next support at 19,625 points, followed by 18,134 points. As the bearish momentum is still in play, the research house is maintaining its negative bias.
Traders are advised to stick with the ‘SHORT’ positions initiated at 21,129 points or the close of 11 April. To minimise trading risks, the stop-loss threshold is fixed at 21,595 points. The immediate support is marked at 19,625 points – 27 April’s low – and followed by 18,134 points, i.e. the low of 16 March. The nearest resistance is pegged at 21,129 points – 11 April’s close – and followed by 21,595 points or the high of 14 April.
