RHB Research holds the opinion of the bears still in control, hence maintains ‘short’ position on HSI futures.
The HSIF rebounded from the 20,500-point support to climb above the 50-day SMA line. Last Friday, it rose 250 points during the day to close at 20,995 points. In the evening, its upside movement was blocked by the 21,200-point resistance and it last traded at 20,914 pts. The latest price action reaffirms that the 20,500-point level is acting as a strong downside support. Breaching this threshold should attract strong selling pressure, which would drag the index towards the 20,000-point level. Meanwhile, the bulls are eyeing the 21,200-point resistance – if it crosses this point, the Bullish Crossover signal would be in effect again. This may lift the index towards negating the Bearish Marubozu. However, at this stage, the long bearish candlestick remains intact, and it is believed that the bears are still in control. As such, the research house maintain a negative bias.
Traders should remain in the short positions initiated at 20,598 points, or the closing of 13 June’s evening session. To minimise the trading risks, the stop-loss has been revised to 21,400 points from 22,000 points. The immediate support is at 20,500 points, followed by 20,000 points. Towards the upside, the nearest resistance is pegged at 21,200 points, followed by 21,758 points ie the high of 13 June.
