Once again, RHB Research has maintained “short” positions on HSI futures.
The HSIF failed to stage a meaningful rebound to reclaim the 50-day SMA line, despite recouping 45 pts last Friday and settling at 20,618 points. The index started off Friday’s session at 20,584 points. After a mild rebound towards the day’s high of 20,808 points, it retreated and closed at 20,618 points. In the evening, it fell 190 points to last trade at 20,428 points. The latest price action sees the index struggling to stay above the 20,543-point support. Closing below the immediate support will attract strong selling pressure towards the next support at 20,285 points. For now, we think the bulls may attempt to defend the support line of the One White Soldier bullish candlestick. However, since the index’s upside movement has been blocked by the 50-day SMA line, coupled with the 21,000-point resistance remaining intact and the “higher high” pattern yet to form, the bearish structure looks to be strengthening. With the downside risk increasing, the support level continues to remain weak. As the index is still undergoing a correction, the research house is holding on to its negative bias.
Traders are advised to keep the short positions initiated at 20,836 points, or the closing level of 12 July. To mitigate the trading risks, the stop-loss is fixed at 21,000 points.
The immediate support remains at 20,543 points – 14 Jul’s low – followed by 20,285 points, or the close of 15 July. For now, the immediate resistance is pegged at 21,000 points, with the higher resistance at 21,506 points, or the close of 6 July.
