With the negative momentum seen in HSI futures, RHB Research has maintained “short” positions on this derivative.
The HSIF’s negative momentum halted at the 20,000-point level, thereby allowing the index to stage a rebound of 41 points to close at 20,135 points. Yesterday, the index started off on negative sentiment, opening at 20,083 points and falling to the day’s low of 19,856 points. After the index found its day’s low, the momentum changed in the afternoon, lifting the index towards the day’s high of 20,235 before the close. In the evening, the index fell 228 points and last traded at 19,907 points. The latest candlestick with a long lower shadow affirms that the 20,000-point level is acting as a strong support. For the coming sessions, the index should move sideways for consolidation along this level. In the event the immediate support gives way, sentiment will turn negative again and attract as a strong selling pressure. Meanwhile, the bulls may attempt to move higher to negate the Bearish Marubozu pattern that formed on 29 Jul. For now, since the Bearish Marubozu remains intact, and coupled with the index trading below the 20-day SMA line, we think the bears are still firmly in control. So, the research house is sticking to a negative bias.
Traders are advised to stay with the short positions initiated at 20,836 points, or the closing level of 12 July. To mitigate
the trading risks, the stop-loss is placed at 21,000 points.
The immediate support is marked at 20,000 points, followed by 19,600 points. Conversely, the first resistance is set at
20,660 points, followed by 21,000 points.
