RHB Research has maintained short positions on HSI futures (HSIF).
The HSIF experienced a fresh round of selling yesterday, retracing 261 points to close at 16,250 points and forming a fresh “lower low” bearish pattern. The index began at 16,528 points. During the morning session, it fell towards the 16,016-point session low before rebounding during the afternoon to close at 16,250 points. In the evening, the HSIF recouped 91 points and last traded at 16,341 points. The latest price action saw the index breach the 16,400-point previous support as sentiment remains risk-off. Amidst bearish setup, the HSIF should correct towards the next support at 15,800 points. If the index stages a technical rebound, it may face strong selling pressure near the 20-day SMA line or 16,980-point resistance. As the negative momentum remains in play, the research house retains its negative bias.
Traders are advised to keep the short positions initiated at 17,221 points or the close of 10 Oct. To manage the trading risks, the stop-loss threshold is set at 17,325 points.
The immediate support adjusted to 15,800 points and followed by 15,000 points. Conversely, the immediate resistance is revised to 16,980 points – 19 Oct’s high – and followed by 17,325 points, ie the high of 11 Oct.