RHB Research has maintained short positions on HSI futures.
The HSIF only managed to chart a “lower high” pattern after gaining 98 points to end the September futures contract at 17,346 points. It started yesterday’s session at 17,235 pts and rose to the 17,663-point session high. Profit-taking activity was then seen throughout the session, with the index paring the bulk of its intraday gains to close near the session’s low of 17,183 points. In the evening, the October futures contract last traded at 17,149 points. The latest long upper shadow candlestick showed that bullish momentum remains weak, and the bears are still dominating the session. Although the RSI has fallen into oversold region, the index has yet to stage a meaningful technical rebound.
If the negative momentum follows through, the index should breach the 17,000-point psychological support level, and head towards the next support at 16,400 points. In the upcoming sessions, the index will move sideways until a bearish breakout happens. As the bears are still in control, hence the research house maintains the negative bias.
We advise traders to stick with the short positions initiated at 19,391 points or the close of 2 September. To mitigate the trading risks, the stop-loss is set at 18,000 points.
The immediate support has moved to 17,000 points, followed by the lower support at 16,400 points. Conversely, the immediate resistance is adjusted to 17,650 points, followed by 18,000 points.
