RHB Research has continued to maintain short positions on HSI futures.
The HSIF extended its downward movement on Monday, declining 140 points to close at 18,574 points. The index began Monday’s session at 18,720 points. Although during intraday it rebounded to test the day’s high of 18,792 points, it fell to the day’s low of 18,487 points before closing in negative territory. In the evening, the index recouped 119 points and last traded at 18,693 points. Based on the latest price action, the index has charted a fresh “lower low” with “lower high” bearish candlestick – thereby strengthening the bearish structure. With the RSI indicator hovering below the 50% level, the negative momentum is gaining pace.
If the negative price action follows through, the index should test 18,450 points, followed by the 18,134-point level. A technical rebound may happen if the RSI drops below 30% ie the oversold region. For now, the research house is retaining its negative bias.
Traders are advised to keep to the short positions initiated at 19,391 points, ie the close of 2 September. To mitigate the trading risks, the stop-loss is fixed at 19,455 points.
The immediate support is marked at 18,450 points while lower support is at 18,134 points, or the low of 16 Mar. On the flip
side, the immediate resistance is pegged at 19,150 points – 5 September’s close – followed by the higher resistance of 19,455 points, or the low of 3 August.
