Mid Day Market Update: HSI Futures Staging a Counter-Trend Rebound; Buying Support Continue for WTI Crude ; COMEX Gold Bouncing the Support Level

Hang Seng Index Futures: Staging a Counter-Trend Rebound

RHB Research has maintained ‘SHORT’ positions on HSI futures.

The HSIF underwent a counter-trend rebound, eyeing to test the immediate resistance of 20,300 points. Yesterday, the index climbed 156 points to settle the day session at 19,924 points. During the evening session, it broke past the 20,000-point psychological level and last traded at 20,077 points. Breaching the 20,300-point resistance will see the HSIF rising above the 20-day SMA line.

However, the research house is of the opinion that the selling pressure will persist along the 50-day SMA line, where the 20,694-point mark should act as strong resistance. Coupled with the Bearish Marubozu that formed on 6 May, the rebound should face a stiff challenge at the 50-day SMA line. As long as the index trades below this line, we think the bearish trend will remain intact. Hence, the house is keeping to their negative bias until the stop-loss point is breached.

WTI Crude : Buying Momentum Persists

With stop-loss point triggered, hence RHB Research has inititated ‘LONG’ positions on WTI Crude.

The WTI Crude printed its bullish momentum for four consecutive sessions yesterday as it added USD3.71 to settle at USD114.20 – crossing above the USD110.00 stop-loss or resistance. The commodity initially opened at USD110.98 and then fell towards the USD108.11 low. Buying pressure then emerged to bounce the black gold strongly northwards – it then hit the USD114.90 intraday high near the close. The bullish candlestick that formed a “higher high” bullish pattern – following last Thursday’s “bullish engulfing” pattern – firms up the uptrend momentum above the 50-day average line in the medium term. This is supported by the RSI strengthening at the 61% level. Since this stop-loss point has been breached, hence the research house has shifted their negative trading bias to a positive one.

COMEX Gold: Bouncing Off The USD1,800 Support

The research house has called on a ‘SHORT’ positions on COMEX Gold.

The COMEX Gold bounced off the USD1,800 support on Monday, rising USD5.80 and settling at USD1,814. The commodity started the session at USD1,809.40. At one point, it fell to the USD1,785 session low. The bulls then lifted the precious metal to test the USD1,826 session high before closing at USD1,814 – printing a candlestick with long lower shadow. The latest price action affirms that USD1,800 is providing strong support. If the bullish momentum continues, the COMEX Gold will climb towards the USD1,860 resistance. However, the 20- and 50-day SMA lines have been trending lower, further strengthening the bearish structure. Coupled with the RSI still hovering below the 50% level – echoing that the momentum remains weak – it is believed the rebound will be capped by the immediate resistance. For now, the house is keeping to their negative trading bias.

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