HSI Made A Strong Rebound Yesterday, What Is Next for HSI Futures?

RHB Research is maintaining short positions on HSI futures.

The HSIF struggled to extend the counter-trend rebound yesterday, climbing 313 points to close at 16,880 points. It initially opened at 16,588 points and then climbed to test the 16,960-point session high before the close. However, profit-taking activities were seen during the evening session, where the index retraced 192 points and last traded at 16,688 points. At this stage, the HSIF has yet to form a meaningful “higher high” bullish pattern. Coupled with the 20-day SMA line still trending lower, this will add downwards pressure on the index. If it fails to climb above the 20-day SMA line, selling pressure may increase again and lead a retracement towards 16,400 points, followed by 15,800 points. As long as the HSIF remains below the 20-day SMA line, no change to a negative bias.

Traders should hold on to short positions initiated at 17,221 points or the close of 10 Oct. To manage the trading risks,
the stop-loss threshold is placed at 17,325 points.

The immediate support is fixed at 16,400 points and followed by 15,800 points. Conversely, the immediate resistance is set
at 17,325 points – 11 Oct’s high – and followed by 17,798 points, which was the high of 10 Oct.

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