RHB Research has initiated short positions on HSI futures.
The HSIF remains on track on its downtrend, as it retraced 124 pts to close weaker at 16,725 pts – trading near the 11-year’s low.
Yesterday, the index opened at 16,831 pts, then oscillated between 17,059 pts and 16,445 pts before closing. In the evening, the index fell 83 pts and last traded at 16,642 pts. In the latest session, the index printed a fresh “lower low” bearish candlestick.
While it did undergo a rebound at one point, the HSIF failed to chart a “higher high”.
The price action signals that the bears have been in the driver’s seat – so the index should be heading for a further correction.
As such, expect a follow-through price action to test the next support of 16,400 pts, followed by 15,800 pts. Since the bears remain in control, we make no change to our negative bias, RTT News reported.
Meanwhile, the Hong Kong stock market has moved lower in five straight sessions, tumbling almost 1,400 points or 7.8 percent along the way. Now at a fresh 11-year low, the Hang Seng Index sits just above the 16,830-point plateau and it’s tipped to open under pressure again on Thursday.
The global forecast for the Asian markets remains soft amidst uncertainty over interest rates and the health of the global economy. The European and U.S. markets were slightly lower and the Asian bourses are likely to open in similar fashion.
The Hang Seng finished modestly lower on Wednesday as the financials, properties and technology stocks ended mostly in the red.