RHB Research has maintain short positions on HSI futures.
Sentiment turned negative on Monday as the HSIF plunged 1051 points to close at 15,134 points – a level last seen in Apr 2009. The index initially started off at 16,170 points. Soon after beginning the morning session, it dived on strong selling pressure and hit the 15,092-point day low before the close. In the evening, the HSIF fell another 30 points and last traded at 15,104 points. The latest bearish candlestick with wide body showed the fear is at maximum now. A follow through of the negative price action will see a correction below the 15,000-point level and reach 14,000 points. However, the RSI is now observed at the oversold region. Hence, the index may stage a technical rebound to test the 16,392-point resistance. As sentiment now remains risk-off, the correction may continue until the HSIF forms a bullish reversal candlestick. Consequently, no change to negative bias unchanged.
Traders should hold on to the short positions initiated at 17,221 points or the close of 10 Oct. To minimise the trading risks, the stop-loss threshold is adjusted to 17,000 points from 17,325 points.
The immediate support is adjusted to 15,000 points and followed by 14,000 points. Conversely, the immediate resistance is revised to 16,392 points – 25 Oct’s high – and followed by the 17,000-point round number.
