Stop-loss triggered hence RHB Research has initiated “long” positions on HSI futures.
The HSIF underwent a strong rebound on Thursday, climbing 681 points to close at 19,917 points – reclaiming the 20-day SMA line. The index opened at 19,252 points. After trading resumed (post weather disruption), sentiment shifted, as a new stimulus package was announced by the authorities. The index surged to the session’s high of 19,974 points before the close. In the evening session, it climbed 226 points and broke past the psychological resistance pegged at 20,000 points. With the latest bullish breakout, the bulls have set their sights on the 20,200-point and 20,660-point levels. Towards the downside, the index has reclaimed the 19,455-point level, which is now acting as a support level. The bearish breakout on 24 August has been negated by the recent bullish candlestick. As the index has surpassed the stop-loss on renewed momentum, we shift to a positive bias.
The research house closed out the short positions initiated at 20,836 points (12 July’s close) after the stop-loss at 20,000 points was triggered. We initiate long positions at the close of 25 Aug’s extended session, or 20,143 points.
To manage trading risks, the initial stop-loss is set at 19,455 points. The immediate support is now back at 19,455 points – 3 Aug’s low – followed by 19,063 points, or the low of 10 May. Towards the upside, the first resistance is pegged at 20,200 pts, followed by 20,660 points, which was the high of 29 July.
