RHB Research has maintained short positions on HSI futures.
After resuming trading following the weather disruption, the HSIF pulled back 508 pts and closed at 15,322 points. Yesterday, the index began the session at 15,470 points. It traded between the tight range of 15,584 points and 15,219 points before the close. Then in the evening session, it rebounded 228 points and last traded at 15,550 points. The latest price action saw the commodity chart a “lower high” bearish pattern, indicating that the bullish momentum is losing steam and is poised to set off a correction. Should the negative momentum follow through, the index will retrace towards the recent low at 14,615-point level. At this stage, observe that the 20-day SMA line is trending lower. As long as the index remains below the moving average line, the bearish setup is deemed intact. Hence, the research house is keeping its negative bias unchanged.
Traders should keep the short positions initiated at 17,221 points, or the close of 10 Oct. To mitigate the trading risks, the stop-loss is placed at 16,392 points.
The immediate support is marked at 14,615 points – 31 Oct’s low – followed by 14,000 pts. Meanwhile, the immediate
resistance stays at 15,843 points – 27 Oct’s high – followed by 16,392 points, or the high of 24 Oct.
