Mid Day Market Update: Selling Pressure Persists for HSI Futures

RHB Research has continued to maintain ‘SHORT’ positions on HSI futures with downside risks / selling pressure on the HSI.

The HSIF experienced a session of two halves yesterday. It first rebounded 295 points to settle the day session at 19,769 points, and then gave up the gains during the evening session, retreating 379 points. It was last traded at 19,390 points. The price action showed that bullish momentum was short lived, and the bulls remain weak.

It has been observed that the index has been charting “lower highs”, suggesting that strong selling pressure is keeping the HSIF from moving higher. In addition to this, the index has yet to form a meaningful bullish reversal pattern. Hence, it is likely that the index will retrace towards the 19,000-point immediate support level.

However, a breach of the immediate threshold will lead to a fresh leg of downside movement. For now, the research house is holding on to their negative bias.

Traders should retain the short positions initiated at 21,129 points or the close of 11 April. To manage the trading risks,
the stop-loss is set at 21,216 points (5 May’s high). The immediate support is marked at the 19,000-point round figure, followed by 18,134 points or the low of 16 March. Conversely, the immediate resistance is pegged at 20,300 points, followed by 20,694 points or the high of 6 May.

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