HSI Futures’ Psychological Level Maintained at 20,000 Point Level

In view of the cautious mood mixed a mild bearish momentum, RHB Research has maintained “short” positions on HSI futures.

Amidst negative sentiment, the HSIF struggled to stay above the 20,000-point psychological level and closed weaker at 20,007 points. After the index failed to stage a bullish breakout last Friday, it opened Monday’s session at 20,111 points. After trading between 20,165 points and 19,908 points, it closed in negative territory. In the evening, the index fell 49 points and last traded at 19,958 points. As it closed below the immediate resistance, the Bearish Marubozu formed on 29 July is deemed as active and has strengthened. Expect strong selling pressure to emerge near the 20,200-point immediate resistance. For now, the HSIF has yet to chart a fresh “higher high” bullish pattern – which indicates that the bears are in the driver’s seat now. A follow-through of the negative momentum should lead to a correction towards the recent low of 19,455 points, followed by the 19,063-point level. At this juncture, the research house will stick to a bearish trading bias.

Traders should maintain the short positions initiated at 20,836 points (12 July’s close). To manage the trading risks, the
stop-loss is fixed at 20,200 points.

The immediate support remains at 19,455 points – 3 August’s low – followed by 19,063 points, or the low of 10 May. On the
flip side, the immediate resistance remains at 20,200 points, followed by 21,000 points.

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