The Bears Continue to Haunt HSI Futures

RHB Research has retained short positions on HSI futures.

The HSIF dropped by 148 points last Friday to close at 18,714 points. It opened at 18,853 points that day. After oscillating between 18,949 points and 18,636 points, it closed in negative territory. During the evening session, it shed another 38 points and last traded at 18,676 points. The negative price action affirms that the bears are in control now, and the bulls are at their weakest. Both the 20-day and 50-day SMA lines continue to trend downwards, thereby strengthening the bearish setup. Expect the index to extend the downward movement until it reaches a rejection level or forms a bullish reversal candlestick. At this stage, it is expected another leg on the downside – and so make no change to negative bias.

Traders are advised to remain in the short positions initiated at 19,391 points, ie the close of 2 September. To minimise the trading risks, the stop-loss threshold is placed at 19,455 points.

The immediate support has been changed to 18,450 points, then 18,134 points or the low of 16 March. On the flip side, the
immediate resistance is now at 19,150 points – 5 September’s close – and followed by 19,455 points, which was the low of 3 Aug.

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