Stop-loss point triggered; hence RHB Research has initiated short positions on HSI futures.
The HSIF failed to cross above the 20-day SMA line and experienced strong selling pressure yesterday, plummeting 515 pts to close weaker at 17,221 pts. The index initially started off at 17,768 pts and dipped to the 17,188-pt day low before the close. In the evening, it retreated 99 pts and last traded at 17,122 pts. The latest long bearish candlestick showed the bears were dominant, erasing the bulk of 5 Oct’s gains. The negative price action also affirmed that the brief counter-trend rebound, which started from 5 Oct, is coming to an end and will be taken over by the correction phase. On the upside, the 20-day SMA line remains as overhead resistance and should continue to trend lower. Since the bears are now back in the driver’s seat by reaching below the 17,400-pt support, the research house has shifted to a negative bias.
The research house closed out the long positions initiated at 18,083 pts – 5 Oct’s close – after the 17,400-pt stop-loss was triggered. Conversely, we initiate short position at the close of 10 Oct, ie 17,221 pts. To mitigate the trading risks, the initial
stop-loss threshold is set at 18,205 pts.
The immediate support is adjusted to 17,000 pts and followed by 16,400 pts. The immediate resistance is changed to
17,798 pts – 10 Oct’s high – and followed by 18,205 pts or the high of 5 Oct.
