The Hang Seng Index Futures (HSIF)’s countertrend rebound was blocked by strong resistance at the 19,455-pt level.
Yesterday, the index started off the session at 19,487 pts.
RHB Research cited at one point, it jumped towards the day’s high of 19,515 pts but strong selling pressure dragged it lower to close at 19,316 pts – leaving a long upper shadow.
In the evening, selling pressure increased again, which saw the index shed 452 pts to last trade at 18,864 pts.
The latest price action shows a strong resistance has formed at the 19,455-pt level. As long as the index continues to trade below this threshold, the bears will have the technical advantage.
Furthermore, the 20-day SMA line is trending lower in tandem with the RSI turning lower, these indicate that the negative momentum is regaining strength. Should the index breach the 18,774-pt support, it would correct towards the YTD low at 18,134 pts. Since the bears remain in control, we keep to our negative bias.
