HSI Futures Consolidating Sideways

HKEX

Strong resistance met, hence RHB Research is still maintaining short positions.

The HSIF again failed to breach the immediate resistance of 20,200 pts, and closed at 20,034 pts yesterday. It opened at 20,116 points. At one point in the morning, it jumped above the resistance to test the intraday high of 20,255 points, before the bears pulled it down to the closing level. In the evening, it recouped 32 points and last traded at 20,066 points. The price action shows that the immediate resistance remains intact. The index is consolidating sideways, while the momentum has yet to pick up again. If the buyers lose steam, the index may resume the downtrend and retreat to the 19,455-point support. Note that the 20-day SMA line is trending lower, which adds pressure on the index. The technical signals indicate that the bears have the advantage now – no change to the negative bias.

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

The immediate support is 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 is pegged at 20,200 points, followed by 21,000 points

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