HSI Futures Staging a Rebound

HSI futures going through consolidation, RHB Research is maintaining “short” positions on this derivatives.

Negative momentum on the HSIF softened yesterday, and the index rebounded 131 points to close at 19,728 points. It opened at 19,592 points, then traded between 19,972 points and 19,455 points, before closing in positive territory. In the evening, the index rose 204 points and last traded at 19,932 points. The latest price action indicates that the HSIF held back the bears, not to register a fresh “lower low”. However, the momentum remains weak as the index still charted a “lower high”. As such, it is believed the bears are still in control and the index will likely resort to a sideways movement in the coming sessions. If it attempts an upside rebound, it may meet with strong resistance at the 20,200-pt level. As the RSI is still below the 50% point, the index may breach the immediate resistance. Post sideways consolidation, the downtrend may be resumed. Hence, the research house is holding to a bearish trading bias.

Traders are advised to hold on the short positions that initiated at 20,836 points (12 July’s close). To manage the trading risks, the stop-loss is fixed at 21,000 points.

The immediate support is at 19,063 points – 10 May’s low – followed by 18,134 points or the low of 16 Mar. Meanwhile, the
first resistance is pegged at 20,200 points, followed by 21,000 points.

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