RHB Research has maintained “short” positions on HSI futures.
The HSIF failed to develop its countertrend rebound after yesterday’s strong selldown dragged it 508 points lower to settle at 18,808 points – touching the nearest support level of 18,774 points. The index started the session at 19,308 points and briefly touched the 19,405-point high before strong selling momentum kicked-in to dominate the rest of the session. It then fell to the 18,759-point low before the close – printing a long bearish candlestick.
In the evening, the index moved sideways and was last traded at 18,801 points. The latest price action has firmed up the downtrend pattern below the 20-day average line, as it formed another “lower high” bearish structure below this level, while heading towards the immediate support level of 18,774 points to form a fresh “lower low” in the coming sessions. This is coupled with the weakening RSI, which is pointing at 35%, indicating that the bears have a technical advantage. As the bears remain in control, no change to negative bias.
Traders are recommended to keep the short positions initiated at 19,391 points, or the close of 2 September. To manage the trading risks, the stop-loss threshold is set at 19,455 points.
The immediate support stays at 18,774 points – 7 September’s low – followed by the lower support at 18,134 points, or the low of 16 March. The immediate resistance is still pegged at 19,455 points – 3 August’s low – followed by 20,000 points
