RHB Research has continued to maintain short positions on HSI futures.
The bears were seen gripping the HSIF stronger yesterday, as the index extended its correction and closed lower at 17,829 points. It started off the session at 17,862 points and, after trading between 17,975 points and 17,653 points, it closed at 17,829 points. During the evening session, sentiment turned bearish again, which saw a retracement of 216 points – it last traded at 17,613 points. The HSIF has been observed charting a series of “lower highs” with “lower lows”, reaffirming that a strong downwards movement remains in play.
If the negative momentum follows through, the index should hit the next support at 17,500 points, followed by 17,000 points. Conversely, since the HSIF Sep futures contract is expiring before the week’s end, it is expected a counter-trend rebound to occur. In this scenario, the index will test the upside resistance pegged at 18,225 points. The research house is keeping to a bearish bias until a bullish breakout happens.
Traders are recommended to retain the short positions initiated at 19,391 points or the close of 2 September. To mitigate the trading risks, the stop-loss threshold is revised to 18,500 points from 19,455 points.
The immediate support sticks at 17,500 points, followed by 17,000 points. Meanwhile, the immediate resistance is revised to 18,225 points – 23 Sep’s high – while higher resistance is pegged at 18,500 points.
