RHB Research has retained “short” positions on HSI futures.
The HSIF continued to trend southwards last Friday, and ceded 13 points to close at 19,721 points. It opened at 19,747 points, and bounced off towards 19,898 points before the bears pulled it down to print the day’s low of 19,604 points before the close. In the evening, the negative momentum pushed it further downwards, and the index closed at 19,551 points. The downtrend is still firmly in effect, and the HSIF charted a fresh “lower high” with a “lower low”. The sentiment remains negative and the bears are growing stronger now. If it breaches the 19,455-point support, expect strong selling pressure to emerge. The index should then retest May’s low at the 19,063-point level. Although the negative momentum is at its strongest currently, there might be the probability of a technical rebound emerging –because the index is trading at oversold levels now. However, expect strong resistance at 20,000 points. With the bearish momentum in play, no change to negative bias.
Traders are advised to hold on to the short positions initiated at 20,836 points (12 July’s close). To mitigate the trading risks, the stop-loss is placed at 20,200 points.
The immediate support remains at 19,455 points – 3 Aug’s low – followed by 19,063 points, i.e. low of 10 May. Conversely,
the immediate resistance stays at 20,000 points, followed by 20,200 points.
