With the negative bias maintained on HSI futures, RHB Research has again continued its call of “short” positions on HSI futures.
The HSIF charted a fresh “lower low” last Friday after it retraced 429 points to settle at 20,285 points – the lowest close since 30 May. The index opened at 20,682 points that day, then climbed towards the day’s high of 20,726 points before falling to the day’s low of 20,207 points before the close. In the evening, it bounced off the session’s low of 20,074 points, and last traded at 20,330 points. Despite a strong display during the evening sessions, the downtrend remained on track with “lower highs” and “lower lows”. If it undergoes a rebound and climbs above the 20,543-point resistance, this may indicate a false bearish breakout (which happened on 15 Jul) and signal a bullish reversal. Otherwise, a continuation of the correction may trigger a retracement towards 20,000 points, followed by 19,700 points. At this stage, the research house has yet to see a fresh “higher high” pattern – so the research house is holding the view that the bears are still firmly in control. As such, negative bias held on the HSI futures.
It is recommended that traders should maintain the short positions initiated at 20,836 points or the closing level of 12 July. To manage the trading risks, the stop-loss has been revised to 21,000 points, from 22,000 points. The immediate support is now at 20,000 points, followed by 19,700 points. On the flip side, the nearest resistance has been changed to 20,543 points – 14 July’s low – followed by 21,000 points
