With the bearish momentum on the HSI futures yesterday, RHB Research has reiterated its “short” positions on this derivative.
Negative momentum on the HSIF picked up speed yesterday, and it plunged 538 points to close at 19,597 points – breaching both 20,000 points and the 19,600-point support. The index opened at 20,137 points. It then progressed lower throughout the session, reaching the day’s low of 19,470 points before closing in negative territory. In the evening, the index recouped 213 points and last traded at 19,810 points. The latest long bearish candlestick reaffirmed that the sentiment remains weak and bears are still in charge. As the RSI is trending below the 50% threshold, the negative momentum is in play now. There may be an extension of the correction or “lower low” bearish pattern, to test the next support of 19,063 points. The correction will continue until a bullish reversal candlestick emerges, or a candlestick with a long lower shadow. Meanwhile, if the index attempts to stage a technical rebound, 20,200 points will act as the immediate resistance. For now, the research house is sticking to a negative bias.
Traders should keep to the short positions initiated at 20,836 points, i.e. the closing level of 12 Jul. To minimise the trading risks, the stop-loss is set at 21,000 points.
The immediate support has been revised to 19,063 points – 10 May’s low – while the lower support is at 18,134 points or the low of 16 March. Conversely, the nearest resistance is now at 20,200 points, followed by 21,000 points.
