RHB Research has continued to maintain “long” positions on HSI futures.
The HSIF retreated on Monday to close at 20,028 points after its rebound was blocked by the resistance. The index charted a candlestick with long upper shadow, affirming that strong resistance had formed at 20,200 points, and the 20,660-point level. However, the index also left a lower shadow, suggesting that the 20-day SMA line is acting as a support now. As long as the index continues to trade above the short-term moving average line, sentiment will likely improve in the coming sessions. However, falling below the moving average line will lead to a retracement towards the 19,455-point level. Observe that a long bullish candlestick was formed during 25 August’s session, hence, the bulls are still in control. Breaching below the 19,455-point support will weaken the Bullish Marubozu candlestick and dent market sentiment. Despite the index’s rebound capped by the resistance, the research house keeps to its positive bias.
Traders are advised to keep long positions initiated at 20,143 points, or the close of 25 August’s extended session. To minimise the trading risks, the initial stop-loss is fixed at 19,455 points.
The immediate support stays at 19,455 points – 3 August’s low – followed by 19,063 points, or the low of 10 May. Meanwhile, the immediate resistance is kept at 20,200 points, followed by 20,660 points, or the high of 29 July.
