RHB Research has retained its short positions on HSI futures.
Despite the HSIF staging a counter-trend rebound during the day session, selling pressure remains strong – it closed weaker at 17,877 points. The index opened at 17,861 points yesterday, and fell to the day session’s 17,700-point low. It then surged on strong momentum to test the session’s 18,084-point high. However, positive momentum failed to sustain, and the index retraced in the afternoon to close in negative territory. In the evening session, the index fell 34 points and last traded at 17,843 points. The latest “lower high” with “lower low” price action showed that the bears are still in the driver’s seat. The correction should lead the index towards the next support level at 17,500 points, followed by 17,000 points.
Meanwhile, we do not discount the possibility of a technical rebound, as the RSI is in the oversold region. Any rebound attempt would be resisted by selling pressure near 18,500 points. As long as the index stays below the 20-day SMA line, its is deemed the bearish setup as intact. For now, the research house is holding on to its bearish bias.
Traders should keep the short positions initiated at 19,391 points, or the close of 2 September. To manage the trading risks, the stop-loss is fixed at 19,455 points. The immediate support is marked at 17,500 points, followed by 17,000 points. Meanwhile, the immediate resistance stays at 18,500 points, with the higher resistance pegged at 19,000 points.
