As the bullish bias is Maintained, RHB Research has maintained ‘long’ positions on HSI futures.
The HSIF continued to track lower on the holiday eve, as profit taking activities dragged it 111 points down to close at 21,744 points. The index initially started off at 21,861 points. After trading between 22,026 points and 21,609 points, it closed in negative territory. In the evening, the July 2022 futures contract recouped 54 points to last trade at 21,798 points. The index is now testing the 21,500-point immediate support. Bouncing off from here should see it test the resistance pegged at the recent high of 22,413 points. In the event sentiment remains cautious, the index may drift below the 20-day SMA line towards the 50-day SMA line. The research house believes strong support will emerge near the 21,000-point level. As long as the index stays above the 50-day SMA line, the bullish structure will remain. For now, since the momentum indicator RSI still above the 50% level, it is deemed the recent pullback as a consolidation. The index should charge higher once profit taking activities are over. As such, the research house is staying on a bullish bias for now.
Traders are advised to hold on to the long positions initiated at 21,474 points, or the close of 21 June. To protect the downside risks, the stop-loss is revised higher to 20,800 points from 20,500 points. The immediate support is sighted at 21,500 points, followed by 21,000 points. Towards the upside, the nearest resistance is pegged at 22,413 points (28 June’s high), followed by 22,800 points.
