RHB Research has called on maintaining “short” positions on HSI futures
The HSIF extend its correction yesterday, retreating 111 points to settle at 20,714 points – printing a fresh “lower high” with “lower low” bearish pattern. The index started off Thursday’s session at 20,855 points. Initially, it rebounded towards the 20,950-point day high, but momentum fizzled during the afternoon, falling to the day’s low of 20,543 points before closing in negative territory. The latest session saw both the 20- and 50-day SMA lines rounding lower, exerting additional selling pressure on the HSIF. A follow-through of negative price actions will lead the index to retrace towards 20,473 pts, followed by the 20,000-point support. For now, since the RSI has fallen below the 50% threshold, the HSIF is likely to see an extension of the downward movement. In anticipation of another leg on the downside, the research house is keeping to its bearish bias.
Traders are advised to hold on to the short positions initiated at 20,836 points or the closing level of 12 July. To mitigate the
trading risks, the initial stop-loss threshold stays at 22,000 points.
The immediate support remains glued at 20,473 points – 14 June’s low – and is followed by 20,000 points. On the other hand, the immediate resistance is adjusted to the 21,250-point whole number. This is followed by 21,506 points, which was the close of 6 July.
