HSI Futures’ Bullish Structure Deemed Intact Even with Mild Profit-Taking

After a bullish rally before the SAR Establishment Day, the HSI skidded on technical grounds and profit taking activities. Hence, RHB Research is maintaining “long” positions.

Although the HSIF experienced mild selling pressure on Monday, it managed to pare the intraday losses and closed at 21,815 points – staging a strong rebound from the 21,500-point support. The index initially started off the session at 21,745 points. During the morning session, it fell to the 21,400-point day low on profit-taking. It then rebounded strongly during the afternoon to close at 21,815 points, printing a long lower shadow. During the evening session, the HSIF continued to climb 128 points and last traded at 21,943 points. The latest price action showed the 21,500-point immediate support remains intact, and the index is staying above the 20-day SMA line. Coupled with the 50-day SMA line trending higher, the bullish structure is deemed as intact. If the profit-taking extends, the HSIF may retrace towards the 21,000-point support. As long as the trailing-stop level keeps intact, the research house is retaining its bullish stance.

Traders are recommended to keep to the long positions initiated at 21,474 points or the close of 21 June. To mitigate the
downside risks, the stop-loss threshold is adjusted higher to 21,000 points from 20,500 points. The immediate support is formed at 21,500 points, followed by the lower support at 21,000 points. On the upside, the immediate resistance is seen at 22,413 points – 28 June’s high – and followed by the 22,800-point whole number.

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