RHB Research has continued to maintain short positions on HSI futures.
The HSIF continued to drift lower during Wednesday’s session, declining 309 points to close weaker at 18,447 points. It began the session at 18,750 points (also the intraday high). After the opening, the index progressed lower throughout the session until it hit the 18,421-point day low before the close. In the evening, it fell another 8 pts and last traded at 18,439 pts. The latest price action saw the HSIF breached below the 18,450-point support. As such, the negative momentum is gaining strength and may test the YTD low of 18,134 pts. Breaching the immediate support may trigger stronger selling pressure to retrace towards 17,500 points. As mentioned in our previous note, the recent correction started off with the Bearish Marubozu, which formed on 14 Sep. As long as the bearish candlestick stays intact, and the index continues to trade below the 20-day SMA line, the correction will continue until the HSIF hits a strong support level. As the correction is still underway, RHB Research is holding on to its bearish bias.
Traders should keep the short positions initiated at 19,391 points or the close of 2 Sep. To mitigate the trading risks, the
stop-loss threshold is fixed at 19,455 points.
The immediate support is revised to 18,134 points – 16 March’s low – and followed by the 17,500-point whole number. The immediate resistance is now at 19,000 points while the higher resistance is pegged at 19,455 points, ie the low of 3 August.
